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96th CONGRESS : : : : 1st SESSION
JANUARY 15. 1979-JANUARY 3. 1980
HOUSE DOCUMENTS
Vol. 16
MISCELLANEOUS DOCUMENTS
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1979
CONTENTS
No.
134. Ethics manual for Members and employees of House of Representatives.
135. Release of budget authority and review of deferrals.
136. Report of Clerk of House, Jan. 1-Mar. 31, 1979.
137. Extend Jackson-Vanik waiver authority.
138. Supplemental appropriations and budget amendments.
139. Progress in Cyprus negotiations.
m
96th Congress, 1st Session ... - House Document No. 96-134
ETHICS MANUAL FOR MEMBERS
AND EMPLOYEES OF THE
U.S. HOUSE OF REPRESENTATIVES
Prepared at the Direction of
THE COMMITTEE ON STANDARDS OF
OFFICIAL CONDUCT
96th Congress, First Session
U.S. GOVERNMENT PRINTING OFFICE
37-680 WASHINGTON : 1979
COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT
CHARLES E. BENNETT, Florida, Chairman
LEE H. HAMILTON, Indiana FLOYD D RPFNrrw U.M. - .•
s A M R r C K p i Y t E v Ri North carouna ?^ ^sassw*^
MOROAM ifippirv JT B ° B LIVIN QSTON ( Louisiana
JOHN P MARTHA P ? • WILLIAM M " TH0MAS ' CaU '<™**
JOHN P. MURTHA, Pennsylvania F. JAMES SENSENBRENNER, Jr., Wisconsin
RICHARD B. CHENEY, Wyoming
John M. Swanner, Staff Director
William F. Arboqast, Assistant Staff Director
(H)
INTRODUCTION
The purpose of this manual is to provide Members and employees
of the House of Representatives with a reference to the major stand-
ards of conduct, rules, regulations and statutes which are applicable
to Members of Congress and to activities of House staffers, and to
some questions which may be encountered in engaging in those duties
or activities. The manual will provide a highlighting and a brief
discussion of selected ethical and conflict of interest provisions appli-
cable to the subject matter covered, and will refer to relevant decisions
and opinions in that area.
This publication is intended as an overview and a reference tool,
and not as an all-inclusive compilation of ethical or conflict provisions,
nor an exhaustive study of points and authorities in the areas discussed.
Employees of the House are advised to note and consider any general
practice or specific rules of conduct of their employing office or
committee, and to seek assistance on questions of ethical conduct
from appropriate supervisory personnel.
Opinions and advice on conflicts of interest and in the general
area of congressional ethics may be requested by Members or em-
ployees from the House Committee on Standards of Official Conduct.
Questions concerning regulations on official allowances, expenses,
official employment and compensation matters specifically, for exam-
ple, might be directed to the House Administration Committee or
tjbe Office of the Clerk of the House, as appropriate. Specific questions
oh the frankability of mail matter may be directed to, and advisory
opinions on these matters sought from, the House Commission on
Congressional Mailing Standards.
Inquiries relative to certain prohibited nongovernmental activities
in House office buildings may be directed to the House Office Building
Commission.
The manual was prepared and written by Jack Maskell, legislative
attorney, American Law Division of the Congressional Research
Service, Library of Congress.
Members and employees are cautioned that the laws, rules, or
standards of conduct upon which this manual is based, are subject
to change, and notice of any such change should be taken.
(in)
H. Res. 258
In the House of Representatives, U.S.,
May -8$,1979.
Resolved, That there shall be printed as a House document tt\e pub-
lication titled ''Ethics Manual for Members and Employees of the U.S.
House of Representatives". In addition to the usual number, there shalj
be printed one thousand additional copies for the use of the Committee
on Standards of Official Conduct.
Attest :
Edmund L. Henshaw, Jr.,
Clerk.
CONTENTS
Chapter 1. GENERAL ETHICAL STANDARDS: *«*•
Highlight 1
Conduct Reflecting Creditably on the House 3
The Spirit and Letter of House Rules 5
Refraining from Congressional Activity After Conviction. 6
Code of Ethics for Government Service 7
Rules of Supervisors, Committees, Members and Officers. 9
Violations of Ethical Standards ■__ 9
Chapter 2. OFFICIAL EMPLOYMENT AND COMPENSATION OF
STAFF:
Highlight 11
General Employment and Compensation Provisions 13
Nepotism 14
Discrimination 14
Bribes, Political Activities or Contributions for Jobs 15
Salary Kickbacks i ; 15
Performance of Official Duties 16
Chapter 3. OFFICIAL ALLOWANCES:
Highlight 21
Allowance for Official Expenses 22
False Claims, Fraud 23
Recommended Accounting Procedure 24
Unofficial Office Accounts 24
Chapter 4. COMMUNICATIONS TO ADMINISTRATIVE AGEN-
CIES ON BEHALF OF CONSTITUENTS, INCLUD-
ING REFERRALS AND RECOMMENDATIONS FOR
FEDERAL EMPLOYMENT:
Highlight 27
Compensation 30'
Private Representational Activities by Staff 3f
Prohibited Ex Parte Communications 32*
Undue Influence, Fraud 33;
Congressional Standards 35
Recommendations for Employment in the Competitive
Service 36
Recommendations for Employment in the Postal Service. 37
General Statutory Prohibitions _ __ 38
Chapter 5. THE FRANKING PRIVILEGE:
Highlight 39
Authorization to Use the Frank 41
General Standards of Frankability 41
Summary of Guidelines Under the Frank 42
Mass Mailings '. 44
Postal Patron Mail 44
Commission on Congressional Mailing Standards 44
Chapter 6. GIFTS, ENTERTAINMENT AND FAVORS:
Highlight 47
Gifts from Lobbyists, Persons With Direct Interest in
Legislation, and Foreign Nationals 50
Gifts from Foreign Governments 54
Fundraisers and Testimonials 55
Appearances of Influence 57
Bribery 57
Financial Disclosure 58
(V)
VI
Chapter^. OUTSIDE EMPLOYMENT AND COMPENSATION OF
MEMBERS: Paw
Highlight 59
Outside Employment and Official Activities 61
Earned Income Limitation 62
Services Before Federal Agencies 65
Contracting With the Federal Government 67
Private Foundations 69
Foreign Governments 69
Honorarium Restrictions 70
Practice of Law 73
Financial Disclosure. •_ 79
Chapter 8. OUTSIDE EMPLOYMENT AND COMPENSATION OF
HOUSE EMPLOYEES:
Highlight 81
Performance of Congressional Duties 82
Professional Staff of Committees 83
Dealings With the Federal Government 84
Dual Government Employment 86
Foreign Interests 86
Honorarium Restrictions 87
Private Foundations 88
Financial Disclosure Reports 88
Chapter 9. FINANCIAL INTERESTS AND FINANCIAL DIS-
CLOSURE:
Highlight 89
Use of Office for Personal Gain ,. 92
Voting on Matters of Personal Interest ', 94
Interests in Corporations with Government Contracts 97
Financial Disclosure 97
Blind Trusts 100
Chapter 10. CAMPAIGN FUNDS AND PRACTICES:
Highlight 105
General Campaign Finance Requirements 106
Restrictions on the Receipt of Contributions 107
Political Contributions from Federal Employees 108
Use of Campaign Funds 109
Use of Excess Campaign Funds 114
Campaign Activities by House Employees; Use of Con-
gressional Staff on Campaigns 115
Political Contributions by House Employees 116
Campaign Activity in a Federal Building 118
List of Prohibited Campaign Activities 120
APPENDIX
Texts "of Selected Rules, Regulations, Opinions and Statutes Relating to
Conduct Standards: 123
1. House Rules:
House Rule XLIII, the "Code of Official Conduct" 123
House Rule XLV, Prohibition on Unofficial Office Accounts.. 124
House Rule XLVI, Limitations on the Use of the Frank 125
House Rule XLVII, Limitations on Outside Earned Income. 126
House Rule VIII, section 1, Duties Of the Members 127
2. Regulations of the House Committee on Standards of Official
Conduct — Regulations for the Acceptance of Decorations and
Gifts, Including Travel or Expenses for Travel, by Members,
Officers, or Employees of the House of Representatives from
Foreign Governments 127
3. Advisory Opinions of the House Committee on Standards of
Official Conduct:
Advisory Opinion No. 1, On the Role of a Member of the
House of Representatives in Communicating with Execu-
tive and Independent Federal Agencies 130
Advisory Opinion No. 2, On the Subject of a Member's Clerk
Hire 133
Advisory Opinion No. 3, On the Subject of Foreign Travel by
Members and Employees of the House of Representatives
at the Expense of Foreign Governments 134
vn
Texts of Selected Rules, Regulations, Opinions and Statutes Relating to
Conduct Standards — Continued
3. Advisory Opinions of the House Committee on Standards of
Official Conduct — Continued
Advisory Opinion No. 4, On the Propriety of Accepting Pane
Certain Nonpaid Transportation 135
4. Advisory Opinions of the Select Committee on Ethics, U.S. House
of Representatives, 95th Congress:
Advisory Opinion No. 1 137
Advisory Opinion No. 2 137
Advisory Opinion No. 3 139
Advisory Opinion No. 4 140
Advisory Opinion No. 5 142
Advisory Opinion No. 6 143
Advisory Opinion No. 7 145
Advisory Opinion No. 8 148
Advisory Opinion No. 9 150
Advisory Opinion No. 10 152
Advisory Opinion No. 11 155
Advisory Opinion No. 12 156
Advisory Opinion No. 13 160
5. Code of Ethics for Government Service, 72 Stat Part 2, B12 167
6. 2 U.S.C. § 86 (division of salaries) 167
7. 2 U.S.C. §87 (subletting duties) 167
8. 2 U.S.C. §101 (subletting duties) 168
9. 2 U.S.C. §441i (honoraria limits) 168
10. 2 U.S.C. § 701 et. seq. (financial disclosure) 169
11. 5 U.S.C. § 557(d) (ex parte communications) 181
12. 5 U.S.C. §3110 (nepotism) 182
13. 5 U.S.C. § 3303 (recommendations for employment) 183
14. 5 U.S.C. § 5533 (dual Government pay and employment) 183
15. 5 U.S.C. § 7342 (foreign gifts and decorations) 184
16. 18 U.S.C. §201 (bribery) 189
17. 18 U.S.C. § 203 (compensation in matters affecting the Govern-
ment) 191
18 U.S.C. § 204 (practice in Court of Claims by Members) 191
18. 18 U.S.C. § 205 (representation in matters affecting the Govern-
ment) 192
19. 18 U.S.C. § 211 (solicitations to obtain public office) 193
20. 18 U.S.C. § 286 (conspiracy to defraud the United States) 193
21. 18 U.S.C. §287 (false claims) 193
22. 18 U.S.C. §§ 431-433 (contracting with Federal Government, ex-
ceptions) 194
23. 18 U.S.C. § 597 (expenditures to influence voting) 195
24. 18 U.S.C. § 598 (coercion by means of relief appropriations) 195
25. 18 U.S.C. §599 (promise of appointment by candidate) 195
26. 18 U.S.C. § 600 (promise of employment for political activity) __ 195
27. 18 U.S.C. §601 (deprivation of employment for political activity)- 196
28. 18 U.S.C. § 602 (solicitations from Federal emplovees) 196
29. 18 U.S.C. § 603 (solicitation in a Federal building) 197
30. 18 U.S.C. S 604 (solicitation from persons on relief) 197
31. 18 U.S.C. $ 605 (disclosure of names of persons on relief) 197
32. 18 U.S.C. § 606 (intimidation to secure political contributions) __ 197
33. 18 U.S.C. § 607 (making political contributions by Federal em-
ployees) 198
34. 18 U.S.C. §641 (embezzling, stealing public money) 198
35. 18 U.S.C. §1001 (false statements) 198
36. 18 U.S.C. § 1719 (franking privilege) 199
37. 26 U.S.C. §§ 4941 and 4946 (taxes on dealings with foundations).. 199
38. 31 U.S.C. §§231-232 (false claims) 204
39. 31 U.S.C. § 628 (use of appropriated funds) 207
40. 39 U.S.C. § 1002 (political recommendations for the postal
service) 207
41. 39 U.S.C. § 3210 (franking privilege) 208
42. 41 U.S.C. § 22 (interest of Members in Federal contract) ._ 212
Index... 213
Chapter 1. GENERAL ETHICAL STANDARDS
Highlight
Members and employees of the House are instructed by ethical
rules to:
— conduct themselves at all times in a manner which reflects
creditably on the House ;
— abide by the spirit as well as the letter of House rules, that is,
generally speaking, not to attempt to do something indirectly
which they are specifically barred from doing directly;
— abide by the broad ethical standards expressed in the 1958
"Code of Ethics for Government Service".
Members of the House are requested by House Rules to refrain
from certain congressional activity after conviction of some crimes
until the Member's presumption of innocence is reinstated or until
the Member is reelected to the House after conviction.
In addition to the general ethical standards noted, and the specific
standards discussed later in this manual, employees of the House
should be aware of and note any additional rules, regulations, stand-
ards or practices which may be in existence for the specific office for
which the employee works.
(1)
Chapter 1. GENERAL ETHICAL STANDARDS
Conduct Reflecting Creditably on the House. Members and em-
ployees of the House are subject to broad ethical standards adopted
m the Code of Official Conduct of the Rules of the House of Repre-
sentatives. Clause 1 of that Code, House Rule XLIII, states that
"A Member, officer, or employee of the House of Representatives
shall conduct himself at all times in a manner which shall reflect
creditably on the House of Representatives."
In interpreting clause 1 of the Code of Official Conduct recom-
mended by the Standards of Official Conduct Committee of the 90th
Congress, the Committee in its report noted that although "this
standard probably would remain untested", it was included within
the Code to deal with "flagrant" violations of the law which reflect
on "Congress as a whole", and which might otherwise go unpunished:
Since the Constitution quite clearly makes the House
the judge of its own membership, it seems appropriate to
summarize in a single standard a tentative description of
conduct, by which the House through referral from this
committee, can treat promptly with a given act or an ac-
cumulation of acts of a Member which it determines to have
reflected discredit on the Congress.
It is possible that a flagrant violation of law reflecting on
the Congress as a whole could go unpunished if the virtually
unlimited power of law enforcement officials to prosecute
were not exercised. In such circumstances, the legislative
branch would find it difficult to assert the right to be the
judge of its own membership.
A contrary situation might well find an investigation by
this committee establishing that there exists no "probable
grounds" for a particular complaint. Under such conditions,
this finding would have some appearance to enforcement
officials as invocation of the "judge of its own membership"
doctrine. While conceding that this standard probably would
remain untested, the committee feels that it should be a part
of a code of standards in the interest of, and as a safeguard
for the whole. 1
During the floor debates preceding the adoption of the Code of
Official Conduct in the 90th Congress, Representative Price of
Illinois, chairman of the then Select Committee on Standards of
Official Conduct, noted that the committee under clause .1 of the
Code could deal with "any given act or accumulation of acts." 2
Such statement was qualified by the chairman, however, in his
explanation that the committee, in rejecting the notion that viola-
tions of law are simultaneous violations of the Code, has not intended
' House Report No. 1176, 90th Cong., 2d sess., March 14, 1968, p: 17:
2 114 Congressional Record 8778, April 3, 1968.
(3)
to have the Code deal with violations of a minor nature or purely
personal complaints, and that such "acts" with which the committee
may deal under clause 1 must "be severe enough to reflect discredit
on the Congress":
The committee endeavored to draft a code that would
have a deterrent effect against improper conduct and at the
same time be capable of enforcement if violated. Initially
the committee considered making violations of law simul-
taneous violations of the code, but such a direct tie-in was
eventually ruled, out for the reason that it might open the
door to stampedes for investigation of every minor complaint
or purely personal accusation made against a Member. At
the same time there was a need for retaining the ability to
deal with any given act or accumulation of acts which, in the
judgment of the committee, are severe enough to reflect dis-
credit on the Congress. Stated purposefully in subjective
language, this standard [paragraph 1] provides both
assurances. 3
Later in the floor discussion of the Code of Official Conduct, a
member of the 90th Congress Select Committee on Standards of
Official Conduct, Mr. Arends of Illinois, noted that the committee did
try to keep the focus of the proposed rules on official, rather than
personal, conduct: |
The second fundamental to be recognized is that the
Congress has the constitutional right to determine its own
rules. And this right, too, has its limitations. The rules are
applicable only in connection with the operation of the
Congress itself. Somehow a line must be drawn as between
what is personal conduct and what is official conduct. 4
As to the practical operation of this ethical standard, it should be
noted that the House Committee on Standards of Official Conduct
in the 95th Congress recommended disciplinary measures to the full
House concerning the conduct of three Members of the 95th Congress.
The Committee found that certain conduct alleged had violated
clause 1 of the Code of Official Conduct as conduct not reflecting
creditably on the House as a whole. The conduct cited in the reports
by the Committee as sustaining the charges of violations of clause 1
of the Code of Official Conduct dealt generally with the Korean
influence investigation, and specifically referred to alleged statutory
violations in some instances. Included among the alleged statutory
violations cited as constituting violations of clause 1 were failure to
report campaign contributions 5 and perjury. 6 As to conduct violating
clause 1 where no specific statutory violation was cited, the Com-
mittee reports charged a Member with making false writings to the
Committee. 7 The Committee in an earlier Statement of Alleged
*Id.
* 114 Congressional Record 8785, April 3, 1968.
« House Report No. 95-1742, 95th Cong., 2d sess., to accompany H. Res. 1115, 95th Congress, pp. 2-3
(see count 1), referring to Public Law 92-225, section 304(b)(2); House Report No. 95-1743, 95th Cong.,
2d sess., to accompany H. Res. 1416, 95th Congress, pp. 2-3 (count 1), referring to Public Law 92-225,
sections 302(b) and 304.
• H. Rpt. No. 95-1743, supra at pp. 3-4 (count 3; see also count 4 not sustained by the committee), referring
to 18 U.S.C. §1621.
7 House Report No. 95-1741, 95th- Cong., 2d sess., to accompany H. Res. 1414, 95th Cong., pp. 4-5.
5
Violations had cited: tWreceipt of favors or benefits "under circum-
stances which may be construed by reasonable persons as influencing
the performance of Governmental duties" in violation of rule 5 of
the Code of Ethics for Government Service, 8 as conduct which
violates clause 1 of the Code of Official Conduct of the House Rules
as not reflecting creditably on the House. 9 However, the Committee
found that this specific charge was not sustained by clear and con-
vincing evidence in the case presented. The three Members of the
House who were the subjects of the Committee's recommendations
for disciplinary action were officially reprimanded by the House of
Representatives on October 13, 1978. 10 None of the three Members
subject to the disciplinary action was, at the time of the Committee
and House action, under indictment for the specific conduct alleged.
The Spirit and Letter of House Rules. Clause 2 of the Code of
Official Conduct, House Rule XLI1I, provides that "A Member,
officer, or employee of the House of Representatives shall adhere to
the spirit and the letter of the Rules of the House of Representatives
and to the rules of duly constituted committees thereof."
The original purpose of this provision, as noted in the report of the
Committee on Standards of Official Conduct of the 90th Congress in
recommending its adoption, was apparently aimed at dealing with
questions of decorum and legislative practices:
It is also unlikely that the above standard will ever have
to meet the tests of enforcement. Its purpose in the code is to
restate and reemphasize the importance of the precedents of
decorum and consideration that have evolved in the House
over the years. These precedents are more than mere polite-
ness; they are the essence of the order of the House.
The Committee heard recommendations that it draw
standards to reduce the number of time-consuming quorum
calls, govern attendance on the floor and in committee
meetings, and deal with seemingly unfair and dilatory legisla-
tive tactics. Such proposals were considered, but proposed
drafts illustrated the greater impracticality of this approach
in comparison with a more general admonition to observe
the spirit of existing and adequate rules and practices. 11
In the debates preceding the adoption of this provision, however,
it was apparently contemplated that this rule might provide an
actionable standard for congressional discipline. As summarized by
Representative Price, the Chairman of the Committee on Stand-
ards of Official Conduct of the 90th Congress :
This standard was drafted also in general terms rather
than attempting to deal more specifically with such things as
unfair and dilatory legislative tactics. It did not appear prac-
ticable to the committee to attempt to regulate these areas
more closely. This standard should provide the House
the means to deal with infractions that rise to trouble it
« 72 Stat, part II, B 12 (1958).
t H. Rpt. No. 95-1742, supra at pp. 3-J.
"> See Congressional Record, October 13, 1978, at H 12820— H 12828; H 13249— H 13253; H 13253—13261
(dailved.).
" House Report Xo. 1176, 90th Congress, 2d Session, March 14, Hrt'8, p. 17.
6
without burdening it with defining specific charges that would
be difficult to state with precision. 18
The practical effect of clause 2 of the Code of Official Conduct
has apparently been to provide a device for interpretation and con-
struction of other provisions of the Code of Official Conduct and the
House Rules. Generally, it has been suggested that this Rule should
be interpreted to mean that a Member or employee may not do
indirectly what the Member or employee would be barred from doing
directly. The Select Committee on Ethics of the 95th Congress cited
this provision to show that a narrow technical reading of a House
Rule should not overcome the "spirit" of the rule and the intent of the
House in adopting the particular rule. 13 The Select Committee thus
looked into the legislative history of a Rule to find the legislative
purpose and intent in determining the "spirit" of a House Rule. 14
Stated simply, this provision apparently means that the House Rules
should be construed and applied broadly.
Refraining from Congressional Activity After Conviction. On
April 16, 1975, the House adopted an amendment to the Code of
Official Conduct pertaining to a Member of Congress who has been
convicted of a crime. That provision, now clause 10 of House Rule
XLIII, the Code of Official Conduct, provides that a Member of the
House who pleads guilty to or is convicted of a crime for which the
sentence could be two or more years imprisonment should refrain
from committee business and from voting m the House until judicial
or executive proceedings reinstate the Member's presumption of
innocence, or until he is reelected to the House after his conviction.
The report on this measure from the Standards of Official Conduct
Committee noted that the Committee will not, as a rule, take action
on a complaint of a statutory violation by a Member where such con-
duct is known to, and is being acted upon by, the appropriate au-
thorities. However, in the case of allegations of abuses of official
authority or position to which no statute specifically applies, or in the
case of alleged statutory violations where no "expeditious" action
from law enforcement authorities is apparent, the committee will
"concern itself forthwith", and not necessarily defer action on the
matter:
To the question of when to act, the committee adopted a
policy which essentially is: where an allegation is that one
has abused his direct representational or legislative position^—
or his "official conduct" has been questioned — the commit-
tee concerns itself forthwith, because there is no other im-
mediate avenue of remedy. But where an allegation involves
a possible violation of statutory law, and the committee is
assured that the charges are known to and are being expe-
ditiously acted upon by the appropriate authorities, the pol-
icy has been to defer action until the judicial proceedmgs
have run their course. This is not to say the committee
abandons concern in statutory matters — rather it feels it
normally should not undertake duplicative investigations
pending judicial resolution of such cases. 15
ia H4 Congressional Record 8778, April 3, 1968, see also comments by Mr. Teague of Texms, member of the
Standards of Official Conduct Committee of the 90th Congress, 114 Cong. Rec. 8799.
« See Advisory Opinion No. 4, April 6, 1977, of the Select Committee on Ethics, U.S. House of Representa-
tives, 95th Congress.
»* See Advisory Opinion No. 6, May 9, 1977, of the Select Committee on Ethics, 95th Congress, p. 3.
«• House Report No. 94-76, 94th Congress, 1st Session p. 2.
The Committee report noted that this new provision would amend
this procedure and practice to some degree. That is, even if the judicial
process has not entirely run its course, such as when appeals are pend-
ing, the legislative branch will take cognizance of certain guilty pleas
or verdicts against a Member in the manner expressed in the Rule
until the Member's presumption of innocence is reinstated or until the
Member is reelected to the House subsequent to his conviction:
The implementation of this policy has shown, through
experience, only one need for revision. For the House to
withhold any action whatever until ultimate disposition of
a judicial proceeding could mean, in effect, the barring of
any legislative branch action, since the appeals processes
often do, or can be made to, extend over a period longer
than the two-year term of the Member.
Since Members of Congress are not subject to recall and
in the absence of any other means of dealing with such
cases short of reprimand, or censure, or expulsion (which
would be totally inappropriate until final judicial resolution
of the case), public opinion could well interpret inaction as
indifference on the part of the House.
The committee recognizes a very distinguishable link in
the chain of due process — that is, the point at which the
defendant no longer has claim to the presumption of inno-
cence. This point is reached in a criminal prosecution upon
a plea of guilty or upon conviction by a jury or by a judge
(or judges) if jury trial is waived. It is to this condition, and
only to this condition, that the proposed resolution is
directed. 16
Code of Ethics for Government Service. Broad ethical guidelines
for "all Government employees, including officeholders" are expressed
in the "Code of Ethics for Government Service" adopted by the 85th
Congress in 1958. 17 The specific guidelines and conduct standards are
expressed as follows :
Code of Ethics for Government Service
Resolved by the House of Representatives (the Senate con-
curring) , That it is the sense of the Congress that the follow-
ing Code of Ethics should be adhered to by all Government
employees, including officeholders:
Code of Ethics for Government Service
Any person in Government should :
1. Put loyalty to the highest moral principles and to
country above loyalty to persons, party, or Government
department.
2. Uphold the Constitution, laws, and legal regulations
of the United States and of all governments therein and
never be a party to their evasion.
« 72 Stat, part II, Bit. • i
3. Give a full day's labor for a full day's pay; giving to
the performance of his duties his earnest effort and best
thought.
4. Seek to find and employ more efficient and economical
ways of getting tasks accomplished.
5. Never discriminate unfairly by the dispensing of special
favors or privileges to anyone, whether for remuneration or
not; and never accept, for himself or his family, favors or
benefits under circumstances which might be construed by
reasonable persons as influencing the performance of his
governmental duties.
6. Make no private promises of any kind binding upon the
duties of office, since a Government employee has no private
word which can be binding on public duty.
7. Engage in no business with the Government, either
directly or indirectly, which is inconsistent with the con-
scientious performance of his governmental duties.
8. Never use any information coming to him confidentially
in the performance of governmental duties as a means for
making private profit.
9. Expose corruption wherever discovered.
10. Uphold these principles, ever conscious that public
office is a public trust.
Passed July 11, 1958.
The Code of Ethics was adopted as a concurrent resolution 18 ex-
pressing the "sense of Congress", and thus in itself did not have any
legally binding effect. Generally, a concurrent resolution expires at
the end of the Congress which adopted it and does not continue to have
force and effect beyond that Congress. 19 However, the ethical con-
siderations expressed in this Code have been found to remain as
established standards of conduct by which Members, and apparently
employees, of the House should abide. With respect to the applica-
ability of the Code to the conduct of present Members of the House,
the House Committee on Standards of Official Conduct has concluded
that even if the resolution may have technically expired at the end of
the 85th Congress, the ethical precepts expressed in it "represent con-
tinuing traditional standards of ethical conduct to be observed by
Members at all times * * *." 20
As to the practical applicability and enforcement of these provisions
as actionable standards for congressional discipline, the Committee
on Standards of Official Conduct has noted that they are of a broad
general nature "not delineated with any great exactitude", and thus
would require an evaluation of the circumstances of a particular matter
on a case-by-case basis to determine legitimate charges of unethical
conduct:
The Committee is cognizant of the fact that these tradi-
tional standards of conduct as expressed in the Code of
Ethics for Government Service, and as revealed in House
precedents, are not delineated with any great exactitude and
i«H. Con. Res. 175, 85th Congress.
" Riddick, "The United States Congress, Organization and Procedure.," 1949, .p. 21; "Desehler's Pro'
eedure," 1974, ch. 17 § 4.4; "Hinds' Precedents of the House of Representatives," Vol. V, sec. 7053, p. 1023-
para. 1.
-» House Report Xo. 94-1364, 94th Congress, 2d Session, July 23, 1976, p. 3, 7-8.
9
may therefore prove difficult in enforcement. The Committee
is likewise aware that because of the generality of these
standards their violation is easily alleged, and that this may
be subject to some abuse. However, the Committee believes
it was for the very purpose of evaluating particular situations
against existing standards, and of weeding out baseless
charges from legitimate ones, that this Committee was
created. 21
The ethical standards of this Code of Ethics have, in fact, provided
the basis for official charges against Members of the House. In one
instance charges concerning the use of a Member's .official position
for pecuniary gain and the receipt of benefits under circumstances
which may be construed as influencing one's official duties were heard
before the Standards of Official Conduct Committee, resulting event-
ually in an official reprimand of the Member by the full House of
Representatives. 22 In another instance these standards of the Code
provided the basis of a count against a Member of the House in a
Statement of Alleged Violation issued by the Commit tee on Standards
of Official Conduct. Although reprimanded for another count recom-
mended by the Committee to the full House, the particular count
concerning violation of this Code was not forwarded to the full House
since the Committee found that the count had not been sustained by
the evidence presented. 23
Rules of Supervisors, Committees, Members and Officers. Al-
though not compiled in this material, it is important for staff em-
ployees of the House of Representatives to check any additional rules,
regulations or practices which may be in existence for the specific
office or unit for which the employee works. Employing Members or
committees may have established rules and practices for their em-
ployees which are additional to the restrictions and rules generally
applicable to employees of the House.
Violations of Ethical Standards. There are various penalties or
consequences which may arise for a violation of an ethical standard
depending, in the first instance, on the source of the standard of con-
duct. Thus, violations of standards expressed in a criminal statute
may incur a specific fine or imprisonment, or both. Such penalty
is generally provided within the specific language of the statutory
provision, or, as in the case of campaign law violations, in a penalties
section applicable to violations of provisions of a certain chapter of
the Code. In some instances, such as in conversion or use of Govern-
ment funds or property to one's own use, or other misappropriations
or false claims concerning expenses or allowances, an action might be
instituted against a violator for recovery of the funds misappropriated.
Even where no specific penalties are provided, such as in the House
Code of Official Conduct or the Code of Ethics for Government Service,
for example, an employee of the House could be removed from his
position in the House for such misconduct by an employing Member
at his discretion, 24 by the employing committee by majority vote, 25
21 Id. at p. 8.
» H. Rpt. No. 94-1364, supra.
» H. Rpt. No. 95-1742, supra, see count 3 at pp. 3-1.
2 «2 U.S.C. J 92.
« See House Rule XI, cl. 6(a)(4) and 6(b)(3),
45-837 O - 79 - 2
10
or by an officer of Congress having responsibility for supervision of an
employee. 26
The House Committee on Standards of Official Conduct is specifically
authorized by the House Rules to recommend to the House "adminis-
trative actions" deemed appropriate to enforce standards of conduct
for both Members and employees of the House ; to investigate alleged
violations of any law, rule or regulation pertaining to official conduct
of an employee or Member and to recommend to the House action as
the Committee deems appropriate ; and may report, with the approval
of the House, apparent violations of law uncovered in investigations to
the appropriate law enforcement authorities. 27 Each House of Congress
is specifically authorized under the Constitution to "punish its Mem-
bers for disorderly Behaviour, and, with the concurrence of two thirds,
expel a Member." 28 Under the authority to punish a Member for
disorderly behavior, precedents have shown that the House, in addi-
tion to expelling a Member, may punish a Member by censure, rep-
rimand, fine, condemnation, suspension or by demanding an apology
from such Member because of misconduct. 29
« 2 U.S.C. § 60-1; see also 2 U.S.C. § 90.
" House Rule X(e).
2 8 United States Constitution, Art. I, Section 5, cl. 2.
29 "House of Representatives Exclusion, Censure, and Expulsion Cases from 1789 to 1973," committee
print Joint Committee on Congressional Operations, 93d Congress, 1st Session; See H. Rpt. No. 94-1304,
Committee on Standards of Official Conduct, 94th Congress, 2d Session.
Chapter 2. OFFICIAL EMPLOYMENT AND
COMPENSATION OF STAFF
Highlight
An officer, employee, or Member of Congress may not :
— hire, promote, or recommend for promotion a relative;
— discriminate on the basis of race, color, religion, sex, or na-
tional origin in hiring, pay or working conditions;
— prevent someone, or threaten to prevent someone, from
getting a Federal job or benefit in order to obtain a political
contribution or to coerce political activity.
An employee of the House may not be required to :
— divide or share his salary;
— "kickback" a portion of his salary to a Member or an aide;
— spend personal money to benefit the Member or the operations
of a Member's office;
— agree to apply part of his salary in the future to some indebted-
ness or obligation of the Member.
A Member or an employee of the House should note that:
— there are no formal job descriptions for those on the clerk
hire rolls of a Member and for those on committee staffs;
— a House employee is.paidjrom United States Treasury funds
for the regular performance of official duties which are com-
mensurate with the compensation received;
— employees are not compensated to perform non-official, per-
sonal, or campaign duties on behalf of the Member or anyone
else;
— once employees fulfill the official duties which they are re-
quired to perform, they may generally engage in non-official,
personal or campaign activities on their free time.
(11)
Chapter 2. OFFICIAL EMPLOYMENT AND
COMPENSATION OF STAFF
The subject of employment, compensation, and utilization of staff
employees of the Congress has in recent years become an area of
increased concern in the field of congressional ethics. 1 Several Members
and congressional aides have become involved in prosecutions, suits
and allegations concerning such problems as nepotism, discrimination
in hiring, salary "kickbacks", and the "padding" of congressional
payrolls with persons who do not perform any congressional duties.
It has been noted that although Congress has enacted numerous
laws to deal with certain employment and compensation issues and
problems of employee-employer relations in the private sector (and in
some instances in the Federal sector) such as the provisions of the
Fair Labor Standards Act, the Occupational Safety and Health Act,
the National Labor Relations Act, and the Age Discrimination Act,
the Congress itself does not, as of this date, generally come within the
coverage of such legislation. 2 Specific statutes, regulations, and rules,
however, have been adopted relating to some potential problems in
the area of employment and compensation in the House, such as the
ones discussed in this manual covering restrictions on nepotism and
discrimination in hiring and compensation, regulations on minimum
and maximum rates of pay for clerk hire individuals, protection against
employees being required to share or divide their salary with another,
and the protection of employees from "kickback" schemes or salary
assessments.
In the area of utilization of congressional staff, one of the important
factors is that for most employees of the House, that is, those on the
clerk hire roles of a Member and those on the staff of a committee,
there are no formal job descriptions or uniform work standards. Such
matters relating to the general terms, conditions and the specific
duties of employment have traditionally been within the discretion of
the Member or the employing committee.
As to the duties required of staff employees in general, however, it
should be noted that the basic standard for compensation of employees
of the House is that the employee has regularly performed official
duties reflecting the compensation he receives. 3 Thus, although there
are no formal job descriptions apparent under House Rule or statute
for those on the clerk-hire rolls of a Member or for committee staff,
employees of the House are paid from funds from the United States
' See: Washington Post, July 1, 1976, p. D 3; January 25, 1976, p. A2; October 10, 1073, p. Al; September 19,
1973. p. D 17: see series of five articles appearing on February 16, 1975, to February 20, 1975, pp. Al; also
Febmavv 7, 1975, p. D 19; New York Times, February 16, 1975, p. 41; October 3, 1976, p. 42.
2 See: 29 U.S.C. §§ 201-219, 203(e)(2)(A)(iii): 29 U.S.C. 5§ eil-378, 652(5); 29 U.S.C. §| 151-166, 152(2); 29
U.S.C . §§ 621-034, 630(b) and 633a; see also lit le 7 of the Civil Rights Act of 1964 (Equal Employment Oppor-
tunity Act) 42 U.S.C. § 2000e et seq., at § 2000e(b) and 2000e-16(a).
3 Regulations of the House Administration Committee: "Regulations and Accounting Procedures for
Allowances and Expenses of Committees, Members and Employees of the U.S. House of Representatives"',
95th Cong., January, 1978, p. 88, para. 2(a) and p. 29, para. 2(a): see also; House Rule XLI1I (8); see Code
of Ethics for Government Service, 72 Stat, part 2, p. B12, para. 3.
(12)
13
Treasury to perform public duties, that is, to assist a Member in his
official responsibilities 4 or to work on official committee business. 5
Such employees are therefore not compensated from public funds to
perform non-official, personal, or campaign duties on behalf of the
Member.
General Employment and Compensation Provisions. Regulations
governing the Member's clerk hire allowance and the employment of
committee staff have been promulgated by the House Administration
Committee. These regulations, entitled "Regulations and Accounting
Procedures for Allowances and Expenses of Committees, Members,
and Employees of the U.S. House of Representatives," should be
referred to for requirements and regulations in this area. Some of the
pro\-isions of those regulations are briefly discussed in this section
below.
The clerk-hire allowance of a Member of the House is available for
the employment of up to 18 persons for the Member's staff. 6 The
regulations issued by the House Administration Committee establish
the total amount of allowance for clerk-hire, the maximum monthly
payout from that allowance, and fix the maximum and minimum an-
nual rates of employee's salaries. 7 The regulations of the House Ad-
ministration Committee note the requirement that compensation from
the clerk-hire allowance is available only for services performed in
Washington, D.C., or in the state or district which the Member
represents, and also provide guidelines for minimum length of employ-
ment, reemployment rules, and provisions regarding leave. 8
The rules concerning the appointment of committee staff are gen-
erally set out in the Rules of the House of Representatives at Rule
XI, clause 6. These provisions establish the number of professional
and clerical staff which may be employed by the standing committees
of the House, 9 and set a limit on rates of pay for such employees. 10
Regulations and guidelines for employment and compensation of
committee staff are also set out in the House Administration regula-
tions at Part II, C.
The regulations of the House Administration Committee provide
for the certification of an employee's salary for official duties on a
monthly basis. These regulations state that salaries will be disbursed
to employees only upon a monthly certification by the appropriate
Member, committee and subcommittee chairman or officer of the
House "as to the amount of said salary, the physical location of each
employee, the regular performance of official duties, and the relation-
ship of each employee to any current Member of Congress." u It
would appear then that compensation may only be received for official
duties performed by the employee within the preceding month, and
thus advance payment to an employee would be contrary to these
regulations. 12
« See, for example, Legislative Appropriations Act of 1978, P.L. 95-94, 91 Stat. 653.
s House Rule XI, cl. 6(a)(3) and (b).
* House Administration Committee Regulations, supra at p. 88 para. 5(a).
7 Id. at 5 (a), (b) and (d).
8 Id. at 5 (c), (e), (f) and 8.
8 House Rule XI, cl. 6, see also cl. 5.
* See House Rule XI, cl. 6(c), see also House Administration Regulations, supra at p. 29, "Employment
of Stall".
11 See note 3, infra.
12 Id.
14
Under provisions of Federal statutory law employees of the House
may not be required, and are not allowed, to share a House position
with another or to divide their House salary with another person. 13
Further, House employees are required to perform their own duties
for which they are compensated, as they are specifically prohibited
under Federal law from subletting:, or being required to sublet to
another any portion of their official duties. 14
Nepotism. Provisions of Federal law generally prohibit a Federal
official from hiring or promoting one of his relatives. The statute, at
5 U.S.C §3110, prohibits a Federal official, including a Member of
Congress, from appointing, promoting, or recommending for appoint-
ment or promotion any "relative" of the official to any agency or
department over which the official exercises authority or control. The
statute specifically lists those relations of a public official which come
within the provision as a "relative" of the official:
"relative" means, with respect to a public official, an indi-
vidual who is related to the public official as father, mother,
son, daughter, brother, sister, uncle, aunt, first cousin,
nephew, niece, husband, wife, father-in-law, mother-in-law,
son-in-law, daughter-in-law, brother-in-law, sister-in-law,
stepfather, stepmother, stepson, stepdaughter, stepbrother,
stepsister, half brother or half sister.
It should be noted that certification as to an employee's relationship
to a Member of Congress must be made on payroll authorizations by
the employing Member, or committee and subcommittee chairman.
The antinepotism law as applied in the House would thus prohibit
the employment of a relative of a Member on that Member's staff
or on the staff of a committee or a subcommittee of which the Member
is chairman.
The antinepotism statute was upheld by a lower Federal court
against the challenge that the provision is unconstitutionally over-
broad by finding that the statute is limited in its applicability to
only "specified kinship relationships." 1S The statute would therefore
not cover "relatives" who are not specifically listed in the statute as
those within the prohibited class. Thus, for example, under common
legal usage, and as construed by the Civil Service Commission in
interpreting this provision, although the "niece" and "nephew" of
an official, that is the children of the official's brothers or sisters, are
within the prohibition, the niece or nephew of an official's spouse (the
children of the brother or sister of an official's spouse) would appar-
ently not be included in the prohibited class. 16
Discrimination. The Rules of the House of Representatives, at
Rule XLIII(9), specifically forbid a Member or an employee of the
House to discharge or refuse to hire any individual, "or otherwise
discriminate against an individual with respect to compensation,
terms, conditions, or privileges of employment, because of such
individual's race, color, religion, sex, or national origin." House Rules
on the hiring of staff members of the standing committees of the
House, Rule XI, cl. 6(a)(3), also provide that professional staffers
"2 U.S.C. §86.
><2 U.S.C. §§87 and 101.
'« Lee v. Blount, 345 F. Supp. 585, 588 (1952).
i» Black's Law Dictionary, 4th Ed., 1968; Ballentine's Law Dictionary, 3rd., Ed., 1969; Federal Personnel
Manual, United States Civil Service Commission, ch. 310, subch. 1, Sec. 102(c).
15
shall be appointed "without regard to race, creed, sex, or age, and
solely on the basis of fitness to perform the duties of their respective
positions", and that the clerical staff of the committee shall likewise
be appointed "without regard to race, creed, sex, or age." 17 In addition
to House Rules against discrimination, it should be noted that a
Member of Congress may be subject to suit and liability concerning
discriminatory employment practices in violation of the equal protec-
tion component of the Fifth Amendment of the United States Con-
stitution. 18
Bribes, Political Activities or Contributions for Jobs. Criminal
statutes within the United States Code prohibit a range of activities
concerning the use of Federal jobs for inducing political activities,
bribes, contributions or the receipt of anything of value. Specifically,
federal law prohibits the receipt of something of value in return for
promising support or use of influence in obtaining someone a federal
post, at 18 U.S.C. §211. As to political activities, section 599 of
title 18, United States Code, prohibits candidates from promising
appointment or use of influence or support in obtaining someone
"any public or private position or employment" in return for political
support, while section 600 of title 18 prohibits anyone from promising
a Federal job or benefit to a person as consideration or a reward for
political support or opposition to any candidate or party. It is also
prohibited under 18 U.S.C. § 601 to deprive or threaten to deprive
any Federal job or benefit as a way to induce political contributions
for a candidate or a party.
Salary Kickbacks. Salary "kickback" schemes may involve a proc-
ess whereby a staff employee will remit or "kickback" a portion of his
salary to the employing Member or to an influential aide, or apply a
portion of his salary for goods or services for the Member's benefit,
agreed to by the staffer under coercion as a condition for employ-
ment. Other schemes which may be called "kickbacks" may involve
the designation of certain persons as employees on the congressional
payroll by the Member or an aide. Such persons designated perform
no congressional duties and then turn their salary checks over to, or
their checks are delivered directly to, the Member or aide involved
in the scheme.
There is no statutory provision under Federal law which expressly
describes and is exclusively aimed at the specific conduct involved
in the various "kickback" schemes. Although there is no specific "anti-
kickback" statute as such, several Members of Congress and congres-
sional aides involved in such "kickback" schemes have been indicted
and prosecuted under a general fraud statute of Federal law at 18
U.S.C. § 100 1. 19 This criminal statute is intended to prevent false
statements to the Government which further a fraudulent scheme.
The statute specifically prohibits the making of any false, fictitious or
17 House Rule XI, cl. 6(b)(1).
18 Davis v. Passman, 544 F.2d 865 (5th Cir. 1977), rehearing en banc 571 F.2d 795 (5th Cir. 1978). Petition
for certiorari was filed on July 17, 1978 (Docket No. 78-5072), by complainant seeking monetary damages
for discrimination found by lower court.
" See, for example, reports of indictments and/or convictions appearing in the press concerning Repre-
sentative Bramblett, Washington Post, Feb. 4, 1954, p. 17 and New York Times, Feb. 10, 1954, p. 1: Repre-
sentative J. Parnell Thomas, Washington Post, November 11, 1948, pp. 1 & 9; New York Times, December 6,
1948, p. 1; Representative J. Irving Whalley, Washington Post, August 1, 1973, p. Cl; George A. Haag,
aide to Representative Collins of Texas, Washington Post* June 14, 1975, p. A3; Representative James
Hastings, Washington Post, Dec. 18, 1976, and New York Times, Dec. 17, 1976; Representative Charles
Diggs, see Washington Post, October 8, 1978, p. Al ; indictment of Michael McPherson, aide to Representative
William Clay, see Wall Street Journal, Sept. 22, 1976, and Washington Post, Sept. 22, 1976, p. A2.
16
fraudulent statements, or knowingly covering up or concealing by
any trick or scheme a material fact, concerning matters in the juris-
diction of any Federal department or agency. The Supreme Court
has found that making false or fraudulent statements or falsifying or
concealing a material fact on payroll vouchers or certifications to a
disbursing officer in the House of Representatives to further a "kick-
back" scheme was that type of false statement or entry "in any matter
within the jurisdiction of any Department or agency of the United
States" within the prohibition of the statute. 20
In addition to convictions under the false statements and Federal
fraud provision, a violation of the Federal mail fraud statute may
occur when the mails are used to distribute the payroll checks or
other funds in furtherance of the "kickback" scheme. 21
As to a scheme whereby the salaries of congressional employees are
applied for the benefit of a Member or a Member's office, the Com-
mittee on Standards of Official Conduct has noted in an advisory
opinion the following:
* * * [lit is improper to levy, as a condition of employ-
ment, any responsibility on any clerk to incur personal
expenditures for the primary benefit of the Member or of the
Member's congressional office operations, such as subscrip-
tions to publications, or purchase of services, goods or
products intended for other than the clerk's own personal
use.
The opinion clearly would prohibit any Member from re-
taining any person from his clerk-hire allowance under either
an express or tacit agreement that the salary to be paid
him is in lieu of any present or future indebtedness of the
Member, any portion of which may be allocable to goods,
products, printing costs, campaign obligations, or any other
nonrepresentational service. 22
Performance of Official Duties. There are generally no uniform job
descriptions or specific work standards appearing in the House Rules
or regulations which are applicable to the duties of those on the
clerk hire rolls of a Member or for committee staff. Some House
employees, generally those under the employ of an officer of the
House, will be subject to the House Employees Position Classifica-
tion Act (2 U.S.C. § 291 et seq.) and the regulations on applicable
employment standards issued by the House Administration Commit-
tee. However, in any case, regulations issued by the House Adminis-
tration Committee provide as a general standard of compensation
that the salary of a House employee will only be disbursed by the
Clerk of the House upon a monthly certification by each Member,
committee and subcommittee chairman, or officer, as to the "regular
performance of official duties" by such employee. 23
Furthermore, the provisions of the legislative appropriations
for clerk hire allowance provide that such allowance is for secur-
ing staff to provide assistance to Members in the discharge of official
2 <> United States v. Bramblett, 348 U.S. 503 (1955).
21 IS U.S.C. § 1341 et seq.: note trial court conviction of Member on this charge, see report in Washington
Post, October 8, 1978, p. Al; see also indictment of United States v. Frank M. Clark. Criminal No. 78-207
(D.C. W. Pa. 1978).
22 House Committee on Standards of Official Conduct, Advisory Opinion No. 2, July 11, 1973.
23 See note 3, infra.
17
and representational duties. 24 In addition to the provisions applicable
to clerk hire, the House Rules state that professional staff members
of the standing committees of the House are to engage only in work
of "committee business; and shall not be assigned any duties other
than those pertaining to committee business." 25 The House Rules
further provide that the clerical staff of the House standing commit-
tees shall work on "matters related to committee work." x
A general ethical standard recognized by the House instructs all
employees to: "Give a full day's labor for a full day's pay; giving to
the performance of his duties his earnest effort and best thought." **
Finally, the Rules of the House specifically provide that a Member
"shall retain no one from his clerk hire allowance who does not per-
form duties commensurate with the compensation he receives." 28
Thus, the underlying standard for the receipt of compensation by
an employee of the House under these provisions is that the employee
has regularly performed official duties which are commensurate with
the compensation he receives. Employees of the House are therefore
paid from funds from the United States Treasury to perform public
duties, that is, to assist a Member in his official legislative and repre-
sentational duties, to work on committee business, or to perform other
official congressional duties, 29 and are thus not compensated from
public funds to perform non-official, personal or campaign activities
on behalf of the Member or anyone else.
It should be noted that as a general appropriations principle, a
Federal statute provides that appropriated funds, unless otherwise
provided by law, are to be used solely for the purposes for which they
were appropriated (31 U.S.C. § 628). Thus, funds appropriated for
congressional staff to perform "official" duties should not be used to
compensate such staff for the performance of activities or duties
related to non-official business.
Under these appropriations principles and the general theory of
misuse of appropriated funds, and fraud, various legal actions have
been initiated against Federal office holders. Some civil suits have
been filed by private individuals against Members of Congress under
the provisions of the False Claims Act for claiming Federal salaries
for staff employees who were allegedly providing non-official personal
services for the Member in return for their compensation from public
funds. 30 These cases by private individuals have generally proved
unsuccessful on procedural grounds, when the Justice Department
has not pursued the matter on behalf of the Government. 31 However,
criminal indictments have been obtained by the Justice Department
in two separate matters against a present and a former Member of
the House for allegedly placing persons on their respective congres-
sional payrolls who did not regularly perform official congressional
duties, but rather performed personal services or duties for or on
2 * See note 4, infra.
J » House Rule XI, cl. 6(a)(3).
» House Rule XI, cl. 6(b;(l).
« Code of Ethics for Government Service, 72 Stat, part 2, B 12, para. 3.
28 House RuleXLIII(8).
«See2 U.S.C. §85.
*> See United States ex rel. Thompson v. Hays, Civ. Nos. 76-1078, 76-1132, 76-1140 (D.D.C Oct. 26, 1977);
Joseph v. Cannon, Civ. No. 77-0452 (D.D.C. filed March 15, 1977):
3 ' But see United States ex rel. Hollander v. Clay, 420 F. Supp. 853 (D.D.C.) pertaining to use of Fderal
funds when Justice Department entered suit.
18
behalf of the Member. 32 The indictments involved include charges
of fraud, mail fraud, and perjury. A conviction has been handed
down by the trial court on all counts of the indictment in one in-
stance/ 3 while the charges in the other matter are still pending against
the former Member as of this writing.
The various provisions discussed above, which work to require
House employees to regularly perform official congressional duties
commensurate with the public compensation they receive, are ap-
parently not to be interpreted as imposing regulations of unreasonable
rigidity in relation to activities of congressional staff. Thus, a "rule of
reason" should generally apply to questions of personal activities,
occasional favors, or errands performed by the staff which may be
ordinary or typical in an office situation or in an employee-employer
relationship.
Additionally, as discussed in the section on campaign activities of
House employees, the House Committee on Standards of Official
Conduct has stated with respect to the performance of official duties
by those on the clerk hire rolls:
. . . [D]ue to the irregular time frame in which the Con-
gress operates, it is unrealistic to impose conventional work
hours and rules on congressional employees. At some times
these employees may work more than double the usual work
week — at others, some less. These employees are expected to
fulfill the clerical work the Member requires during the hours
he requires and generally are free at other periods. 34
Thus, in summary, for House employees on the clerk hire rolls of a
Member and for committee staff there are no formal job descriptions
in statutes, rules or regulations comparable to those under civil
service law. The specific duties of a Member's staff or a committee
staff have traditionally been within the discretion of the employing
Member or committee to best meet the specific needs and requirements
of that Member and his constituents or the employing committee.
The apparent restraints from appropriations provisions and rules for
all House employees are that appropriated funds are to be used to
secure persons to perform official congressional duties commensurate
with the compensation they receive. Committee staff are employed to
perform duties related to committee work. As for staff employees of a
Member, such persons are to be retained to assist the Member in the
discharge of his "official and representational duties."
There is no conclusive listing of what a Member's "official and
representational duties" entail. However, the Supreme Court dis-
cussed such concept in a different context and noted that "legitimate"
activities of a Member include things said or done in the House relating
to official duties and include "legitimate 'errands' performed for
constituents, the making of appointments with Government agencies,
assistance in securing Government contracts, preparing so-called
'newsletters' to constituents, news releases, and speeches delivered
outside Congress." 35 The opinion of the Standards of Official Conduct
33 See reports on indictments of Representative Charles C. Diggs, in Washington Post, March 24, 1978,
p. Al; and indictment of former Representative Frank Clark, Washington Post, September 6, 1978, p. A6
« See report in Washington Post, October 8, 1978, p. Al.
84 See footnote 22, infra.
35 United States v. Brewster, 408 U.S. 501, 512 (1972).
19
Committee provides that an employee must complete those "official"
duties which the Member requires him to perform, and for which he is
compensated from public funds. As long as the employee completes
such duties, he is generally free to engage in personal, campaign, or
other non-official activities on behalf of the Member or on behalf of
someone else.
Chapter 3. OFFICIAL ALLOWANCES
Highlight
Members and their staff should note that:
— allowances made available to an office are for defraying the
"official expenses" of operating a congressional office;
— official allowances received for a congressional office may not
be converted for one's own personal use ;
— in misusing official allowances employees or Members might be
involved in conduct which constitutes making "false claims"
against the Government in violation of Federal law;
— only official allowances and appropriated funds may be used to
defray official office expenses in the House of Representatives.
For required certifications, documentations, and regulations on the
use and accounting for allowances and expenses, Members and their
staff should consult the regulations of the House x^dministration Com-
mittee entitled "Regulations and Accounting Procedures for Allow-
ances and Expenses of Committees, Members and Employees of the
U.S. House of Representatives".
The prohibition on unofficial office accounts bars the use of private
funds from outside sources to defray official office expenses in the
House of Representatives.
(21)
Chapter 3. OFFICIAL ALLOWANCES
Various allowances are authorized for Members of Congress to
defray the official expenses incurred in holding congressional office.
Many of the statutory authorizations for an allowance will specifically
note that such allowance or reimbursement is for expenses of an
"official" or "strictly official" nature. 1 Even when such specific
limitation in an original statutory authorization is not present, the
regulations of the House Administration Committee note that the
general allowance authorized for a Member's office use has been
appropriated for "official expenses" and for the "conduct of the
official and representational duties of the office.". 2
The major legal and ethical problems which arise concerning official
allowances, and the ones with which this report generally deals,
relate to the use of these allowances for other than "official expenses",
including the conversion of money or property to one's own personal
use. Related problems may concern what has been called "double
billing", that is, attempts to receive reimbursement more than once
for the same expense, or may concern the claiming of reimbursements
for non-existent expenses.
Allowance for Official Expenses. The general allowance for a Mem-
ber for the "conduct of the official and representational duties" of his
office, as stated in the regulations of the House Administration Com-
mittee, is to be used for certain specified expenses of a congressional
office and for "other official expenses." "Other official expenses", as
defined in the regulations of the House Administration Committee,
are "ordinary and necessary business expenses incurred in the support
of the official and representational duties of the Member, unless such
expense has been specifically prohibited elsewhere in the regulation." 3
The regulations of the House Administration Committee pertaining
to the "allowance for official expenses" provide examples of those
items of expenses for which this allowance may be used, and list
examples of those items for which the official expense allowance
may not be used. Included in the permissible uses are expenses for:
travel, office equipment lease, district office lease, stationery, tele-
communications, mass mailings* ^postage, computer services, and
other official expenses.
Listed as items excluded from those payable from the official
expenses allowance are:
(1) Expenses relating to the hiring and employment of individ-
uals, including, but not limited to, employment service fees,
transportation of interviewees to and from employment interviews
and cost of relocation upon acceptance or termination of em-
ployment.
« See, for example, 2 U.S.C. §§ 42c, 43b, 46g, 46g-l, 56, and 122a.
2 Regulations and Accounting Procedures for Allowances and Expenses of Committees, Members and
Employees of the U.S. House of Representatives, 95th Congress, Jan. 1978, Committee on House Adminis-
tration, p. Ill, D. para. 1.
3 Regulations and Accounting Procedures, supra at p. 127, M "Provision Relating to Other Official
Expenses".
(22)
23
(2) Items purchased from other than the House stationery
store which have a useful life m excess of the current term of the
Member, and which would have a residual value of more than
$25 upon the expiration of the current term of the Member.
(3) Holiday greeting cards, flowers, and trophies.
(4) Personal advertisements (other than meeting or appearance
notices) .
(5) Donations of any type.
(6) Dues or assessments other than to legislative support
organizations approved by the Committee on House Admin-
istration.
(7) Educational expenses for courses of study, information
and training programs, unless the benefit accrues primarily to
the House and the skill or knowledge is not commonly available.
(8) Purchases of radio and television time.
(9) Parking for Member and employees at district offices,
except when included as an integral part of the lease or occupancy
agreement.
False Claims, Fraud. As an initial statutory consideration, con-
cerning the use of official funds generally, Federal law provides that
funds appropriated by the Federal Government are to be used,
unless otherwise provided by law, only for the purposes for which
appropriated. 4 When funds are used other than for their intended
purposes, the misused funds may arguably be recoverable by the
Government for repayment to the United States Treasury.
The use of official allowances for other than official purposes,
including double billing and claims for nonexistent expenses, might
involve conduct which could subject a Member or an aide to civil
litigation under the False Claims Act. 5 Such a suit may be brought in
the name of the United States by an individual citizen, with the
potential for the Department of Justice taking over the prosecution
under the provisions of the Act when false, fraudulent, or fictitious
claims are allegedly made against the Government. 6
Citizen suits under the False Claims Act, it should be noted, are
often unsuccessful on procedural grounds, since the suit will be dis-
missed if it is shown that the evidence upon which the suit was based
was in the possession of the United States prior to the initiation of the
suit. 7 Many of the law suits against Members of Congress for false
claims, particularly those charging the Member with use of official
staff for personal purposes, were apparently based on information from
newspaper reports or other press revelations and have, therefore, been
dismissed on these grounds. 8 However, in the case of United States
ex rel Hollander v. Clay, 9 the Department of Justice took over prosecu-
tion of the case from the private plaintiff. In that case the Justice De-
partment charged the Member of Congress with false claims and unjust
enrichment at the expense of the United States for allegedly submitting
vouchers and receiving payments for trips which were not taken, and
* 31 U.S.C. § 628.
»2U.S C. §231.
•2 U.S.C. §232.
'Id.
8 See United States ex rel. Thompson v. Hays, Civil Actions No. 76-1078, 1132, and 1140, dismissed by the
court; United States ex rel. Martin- Trigona v. Daley, Civil Action No. 76-1164 (D.D.C.), dismissed: United
States ex rel. Joseph v. Cannon, No. 77-0452 (D.D.C.) dismissed, appeal filed, No. 78-1618 (D.C Cir.).
9 Civil Action No. 76-493 (D.D.C), see 420 F. Supp. 853 (1976): see also Committee Print of the House
Select Committee on Congressional Operations and the Senate Committee on Rules and Administration,
94th Congress, 2d Session, "Identifying Court Proceedings and Actions of Vital Interest to Congress",
final report, pp. 90-94.
24
for allegedly claiming reimbursements for one particular mode of
transportation, when another was actually used, which entitled the
Member to less reimbursement than claimed. The Government and
the Member of Congress settled the suit on October 27, 1976, at a
compromise figure to be repayed by the Member, and the case was
dismissed on October 29, 1976.
The regulations which have been promulgated by the House Ad-
ministration Committee on allowances for official expenses specifically
provide that the "allowance will be disbursed, upon proper certifica-
tion and documentation, for the official expenses of the Member, the
Member's employees or the Member's congressional office." 10 The
regulations note that such documentation "shall include invoices,
receipts or other evidences of expenses incurred." u When such
documentation and certification by voucher of "official" expenses is
required, the use of money received, or the supplies or services secured
by such allowances, for other than the official expenses certified, may
involve a fraud against the Government. The general fraud statute,
18 U.S.C. § 1001, prohibits the making of any false, fictitious, or
fraudulent statements, or usino- false writings, documents, or entries,
concerning any matter within the jurisdiction of an agency or depart-
ment of the United States. As noted in the preceding section, the
Supreme Court has found that this section applies to false statements,
writings or representations made to a disbursing officer of the House
of Representatives in the furtherance of a fraudulent scheme. 12
It should also be noted that criminal provisions of the United
States Code prohibit the making of false or fictitious claims upon the
United States, 13 and prohibit a conspiracy to defraud, the Government
or an agency by obtaining or aidmg in obtaining the payment of
false claims. 14 Criminal liability in some fact situations may potentially
be present if an officer or employee knowingly steals or "converts to his
use or the use of another * * * any money, or thing of value of the
United States", under the provisions of a Federal criminal statute at
18 U.S.C. §641.
Recommended Accounting Procedure. As to the accounting for
allowances and expenses, and general management of official funds,
it. should be noted that the regulations of the House Administration
Committee set out an accounting procedure "designed to provide
Members with a standard and uniform method for tracking authorized
allowances and related expenses." 15 Reference should be made to the
regulations for instructions, illustrations and procedures of the ac-
counting method suggested. Additionally, reference should be made
to the regulations for information on the permissible transferability
of allowances among various accounts and categories of expenses.
Unofficial Office Accounts. The Rules of the House of Representa-
tives, Rule XLV, now prohibit unofficial office accounts, commonly
referred to in the past as "slush funds". Thus, outside private con-
tributions, funds, campaign contributions, or in-kind contributions pf
goods or services, may net be used to support the activities of, or
pay the expenses of, a congressional office. Rather, only appropriated
funds and official allowances may be used for that purpose.
"> House Administration Regulations, supra at p. Ill, para. 3(a).
"Id. at para. 3(b).
« United States v. Bramblelt, 348 U.S. 503 (1955); see also United States ex rel. Hollander v. Clay, 4C0 F.
Supp at 850.
'M8 U.S.C. §287.
« 18 U.S.C. § 28<>, see also 18 U.S.C. { 371.
's House Administiation Regulations and Accounting Procedures, supra at p. 130.
25
The intent of the rule against unofficial office accounts was, as ex-
plained by the House Commission on Administrative Review of the
95th Congress, to build a wall between private funds and official al-
lowances. 16 The recommendations of the House Commission on Admin-
istrative Review, which were substantially adopted on March 2, 1977,
as revisions to the House Rules on conduct (H. Res. 287, 95th Con-
gress), set forth reasons for requiring that official expenses of a Mem-
ber be paid exclusively from official, appropriated funds:
The Commission strongly believes that private funds
should be used only for politically related purposes. Official
allowances should reflect the necessary cost of official ex-
penses. Increasing official allowances ... to eliminate
reliance on private sources represents a small cost to the public
for the benefits to be derived. To suggest otherwise would be
to accept or condone the continuation of the present system
which, at the very least, allows for the appearance of impro-
priety, and, at worst, creates a climate for potential "in-
fluence peddling" through private financing of the official ex-
penses of Members of Congress. 17
Thus, private funds, such as campaign contributions, may be used
only for political campaign purposes and not for cfficial uses. No
specific definition cf "political campaign purposes" for which private
funds may be used is provided in the rules or the legislative history
of the provision; and what would be considered a bonafide campaign
expense as opposed to an "official" expense would depend on the
particularized facts of a specific situation. 18 For example, as noted in
the discussion on the floor of the House during the adoption of the rule
on unofficial office accounts and the rule restricting the use of campaign
funds (see House Rule XLIII(6)), a Member's travel to his home
district might be considered a political expense for which private
campaign funds may be used if the purpose of the trip were politically
related, 19 and that taking certain individuals out to dinner, if such
were a political meeting rather than one relating to official duties,
could be reimbursed or paid from campaign accounts. 20
The legislative history of the unofficial office account prohibition reveals
that the injunction against a Member maintaining or having main-
tained an unofficial account for his use goes as well to accounts
maintained for a Member's benefit, even if such is not maintained for
a Member's direct use; and extends also to "a process whereby funds
are received or expended" as well as to the maintenance of an actual
account or repository. 21
In an interpretation of the unofficial office account prohibition, the
95th Congress Select Committee on Ethics in the House, in an Ad-
visory Opinion, found that the private in-kind contribution of goods or
services for official purposes is prohibited under Rule XLV in a similar
manner as is the private contribution of funds for official purposes. 22
> 6 House Document No. 95-73, 95th Congress, 1st Session, "Financial Ethics", Communications from the
Chairman, House Commission on Administrative Review, February 14, 1977, p. 18.
17 id
is See Congressional Record, March 2, 1977, p. H 1581 (daily ed.), comments by Mr. Frenzel.
' 9 Cong. Rec, supra at 1581.
20 Cong. Rec, supra at 1589.
21 Cong. Rec, supra at 1621.
22 Advisory Opinion No. 6, May 9, 1977.
293-587 O - 79 - 3
26
The Select Committee found, however, that services from govern-
mental agencies, the occasional use of a private meeting room to meet
with constituents, and certain intern programs for a Member's office
when the Member or his staff is not involved in any of the financial
arrangements of the program, would not violate Rule XLV as pro-
hibited in-kirjd contributions of services or facilities from private
sources for a Member's official use. The Select Committee's Advisory
Opinion No. 6, of May 9, 1977, summarized its findings as follows:
For purposes of House Rule XLV, the private contribu-
tion of in-kind services for official purposes is prohibited.
However, Rule XLV does not apply to service provided by
federal, state and local government agencies or to the occa-
sional use of privately-owned meeting space where no public
accommodations are reasonably available for meeting with
constituents. Nor does Rule XLV apply to interns or volun-
teers in a Member's office, based on the understanding that
such intern programs are primarily of educational benefit to
the intern and do not give undue advantage to special interest
groups. However, Members and their staffs may not personal-
ly raise, receive or disburse any private contributions for in-
tern programs associated with their offices.
In addition, the final report of the Select Committee notes that Rule
XLV "is not intended in any way to restrict the Member's use of his
personal funds." Thus, for example, a Member may establish a petty
cash fund out of his personal monies to pay for miscellaneous office
expenses. 23
The House Rules also specifically prohibit sending under the frank
of a Member any mass mailings, such as newsletters or postal patron
mail, which are not paid for exclusively from official funds (House
Rule XLVI(4)). Thus, private funds may not be used to prepare,
print, or distribute any material for a mass mailing (500 or more
substantially identical pieces of mail) under the franking privilege of a
Member of the House.
The rationale behind the restriction on the use of campaign funds,
or other private funds, for defraying the cost of mass mailings under
the frank was explained by the House Commission on Administrative
Review :
The Commission believes that since the franking privilege
is reserved for "official materials," it is inappropriate for
franked mass mailings to be printed and prepared with
private or political funds.
The Commission believes that it is necessary to make a
clear separation between the public purpose and private
interest in the use of the frank, and, therefore, private funds
should not be used to print "official documents." 24
23 House Report 95-1837, 95th Congress, 2nd session, Final Report of the Select Committee on Ethics. P. 25.
24 House Document No. 95-73, supra at 19.
Chapter 4. COMMUNICATIONS TO ADMINISTRATIVE
AGENCIES ON BEHALF OF CONSTITUENTS, INCLUD-
ING REFERRALS AND RECOMMENDATIONS FOR FED-
ERAL EMPLOYMENT
Highlight
Assisting constituents in their dealings with administrative agencies
is generally considered a typical and useful function of a congressional
office.
However, in communicating to a Federal agency on behalf of a
constituent, a Member and his staff may not:
— make prohibited off-the-record contacts to an agency consider-
ing a matter under a formal proceeding;
— receive money or things of value (other than one's salary) in
return for helping someone.
It should be noted that ethical standards instruct Members and
employees that:
— communications to agencies on behalf of constituents may
properly be made:
requesting information or status reports, urging prompt
consideration of a matter, arranging for interviews or
appointments, expressing judgments on a matter (subject
to ex parte communications rules), asking for reconsidera-
tion based on law or regulation ;
— Members and employees may not make fraudulent repre-
sentations to agencies of the Government;
— Members and employees should not place undue or improper
pressure upon administrators, such as by suggestions or threats
of favoritism or reprisals. Such conduct has been characterized
as an "un warranted abuse of the representative role."
Staff employees of a Member may not represent someone before the
Government in a private capacity, that is, other than in the perform-
ance of official congressional duties.
In recommending someone for Federal employment, it should be
noted that:
— there are no specific restrictions applicable to Members and
staff making recommendations and referrals for general
employment in the civil service ;
— however, selection in the civil service is intended to be on merit,
and an appointing officer in the Government may only consider
a recommendation based on the character and residence of the
applicant ;
— recommendations for the postal service may only be made on
the basis of character or residence of the applicant.
(27)
Chapter 4. COMMUNICATIONS TO ADMINISTRATIVE
AGENCIES ON BEHALF OF CONSTITUENTS, INCLUD-
ING REFERRALS AND RECOMMENDATIONS FOR FED-
ERAL EMPLOYMENT
It is often suggested that one important aspect of a Congressman's
representative function is to act as a go-between or conduit between his
constituents and the bureaucracies of the administrative agencies of
the Federal Government. One survey in the early 1970's concerning
congressional office work found that 24.7 percerit of staff time and 27.6
percent of a House Member's time are devoted to "constituency
service." 1
The House Committee on Standards of Official Conduct has noted
that "It is our duty, directly or through our staffs, to assist constit-
uents with their problems before the agencies of the Federal Govern-
ment." 2 Such activity, in the opinion expressed by the late Senator Paul
H. Douglas, serves a useful function in our governmental process by
helping "legislation" and "administration" perform their respective
jobs adequately through the interest of one in the work of the other. 3
In a committee print entitled "Ethics in Government", a subcom-
mittee headed by Senator Douglas stated that legislators performing
casework functions can "legitimately serve as an informal board of
inspectors" of administrators; "can prevent the administrators from
flagging in their zeal , and can detect and check abuses in the conduct
of public business." 4 Douglas concluded in his own study of ethics in
Government that there is "a sound ethical basis for legislators to
represent the interests of constituents and other citizens in their
dealings with administrative officials and bodies." 5
Even though the casework function may be an important congres-
sional duty, it is not left totally unrestricted under Federal law.
Although no statutory provision flatly prohibits all such activity,
Federal law does work to specifically prohibit certain communications
on the merits of a matter, known as ex parte communications, from
a congressional office to an executive or independent agency when a
matter is being adjudicated or is in a formal proceeding within the
agency. 6 As that statute prohibits oft* the record arguments on the
merits by any person in any formal decisionmaking situation, the
expression of a judgment on the merits would seem best put in writing,
with the express request that it be made a part of the record available
to all interested parties and to the public.
Members of Congress and their staff also are specifically prohibited
by law from receiving compensation for any services rendered someone
> Survey by John S. Saloma, reprinted in Congressional Quarterly "Guide to the Congress of the United
States." Congressional Quarterly Service, Washington, 1971, p. 532.
2 Letter from House Committee on Standards of Official Conduct March 14, 1974.
8 Douglas, Paul H., "Ethics in Government," Cambridge 1952, p. 87.
4 "Ethical Standards in Government," Committee Print, Subcommittee of the Committee on Labor and
Public Welfare, United States Senate, 82d Congress, 1st Session, p. 28.
6 Douglas, supra at p. 87.
6 5 U.S.C § 557(d).
(29)
30
before a Federal department, bureau or agency. 7 Additionally, con-
gressional staffers may not represent persons in a private capacity
before the Government or in court concerning a matter affecting the
United States, but may engage in such representational activities only
in connection with performing and fulfilling official congressional
duties. 8 In addition to specific statutory proscriptions, ethical stand-
ards and guidelines exist concerning the permissible scope of such
activities to prevent abuses of office and to prevent undue or improper
influence or pressure upon administrative officials and the adminis-
trative process.
Compensation. Federal criminal law, 18 U.S.C. § 203, prohibits a
Member of Congress and any officer or employee of the Government
from asking for or receiving compensation for "services rendered" in
relation to any matter or proceeding in which the United States is a
party or has an interest, before any Government agency, department,
or bureau. Thus, no funds or things of value, other than one's official
salary, may be received by a Member or his staff for interceding or
for other dealings with an administrative agency on behalf of a con-
stituent. Caution should be exercised in this regard to avoid the
appearance that solicitations of campaign contributions or the receipt
of gifts or entertainment from constituents are connected in any way,
as a quid pro quo, with a legislator's intervention in the administrative
process on behalf of the constituent. A discussion of this problem and
suggestions was offered by Senator Douglas in his book "Ethics in
Government":
It is probably not wrong for the campaign managers of a
legislator before an election to request contributions from
those for whom the legislator has done appreciable favors,
but this should never be presented as a payment for the
services rendered. Moreover, the possibility of such a con-
tribution should never be suggested by the legislator or his
staff at the time the favor is done. Furthermore, a decent
interval of time should be allowed to lapse so that neither
party will feel that there is a close connection between the
two acts. Finally, not the slightest pressure should be put
upon the recipients of the favors in regard to the campaign.
It should be clearly understood that any gift they make is
voluntary and there will be no question of reprisals or lack
of future help by the legislator if the gift is withheld. In
other words, any contribution should be not a quid pro quo
but rather a wholly voluntary offering based upon personal
friendship and a belief in the effectiveness of the legislator
sharpened perhaps by individual experience. 9
Under the forerunner of section 203, a Federal court in the case of
May y. United States, 175 F. 2d 994 (1949), held that even though
the acts of the defendant Congressman in personally contacting a
Federal agency on behalf of a constituent and bringing "his official
prestige and influence to bear upon those officers" may have been
lawful activity and within the "scope of his official duties as a Congress-
man", the gist of the offense was the receipt of compensation for such
'18 U.S.C. §203.
8 18 U.S.C. §205.
9 Douglas, supra at 89-90.
31
action. The court noted that "it is immaterial that those acts were
patriotic, legitimate, and within the scope of his official duties as a
Congressman", holding that a "Congressman cannot legally receive
compensation from a private person for doing his duty in respect to
something in which that person and the United States have interest." 10
In the case of United States v. Johnson, 419 F. 2d 56 (4th Cir. 1969),
a Court of Appeals upheld the conviction of a Congressman for receiv-
ing compensation in connection with his attempt to have the Justice
Department dismiss a mail fraud indictment against the officers of a
savings and loan association. The court there noted, however, that
"Congress did not intend to punish a Congressman for receiving a
gift, contribution, or remuneration for a service not prohibited by
the statute." " As to a service by a Member, which might not come
within the prohibition, a Federal District Court in the case of United
States v. Quinn, 141 F. Supp. 622 (D.N.Y. 1956) held that mere
inquiries by a Member of Congress concerning the status of a matter
pending before a Federal bureau, without discussion of the merits of
the case, did not constitute prohibited "services rendered" within the
statutory framework.
It should be noted that a Member of Congress who is found in viola-
tion of 18 U.S.C. section 203, for taking compensation for services
rendered before Federal agencies, may be liable for repayment of the
amount of compensation unlawfully received under a theory of breach
of fiduciary duty and trust by the Member. In the case of United
States v. Podell, 436 F. Supp. 1039 (1977) aff'd 572 F. 2d 31 (1978),
the court granted a summary judgment for the United States against
a former Member of Congress in the amount which the former Mem-
ber had earlier pleaded guilty to receiving for his assistance rendered,
while a Member of Congress, to an airline company before Federal
agencies concerning the company's request for approval to operate
a certain air route. The District court in the Podell case found that a
violation of section 203 "unquestionably demonstrates a breach of
trust, for in order to fall within its prohibition, a Member of Congress
must shed the duty of disinterested advocacy owed the government
and his constituents in favor of championing private interests poten-
tialty inconsistent with this charge." 12
Private Representational Activities by Staff. A statutory provision
under Federal law, 18 U.S.C. § 205, prohibits legislative employees
(but not Members of Congress) from representing private parties, even
if not for compensation, before the Federal agencies or a court in
matters affecting the United States unless in the discharge of official
governmental duties. Thus, § 205 generally prohibits congressional
staff employees from acting as agent or attorney for someone before a
Federal agency or in court in matters affecting the United States
unless the activity is in the proper discharge of the staffer's official
congressional duties, that is, in assisting a Member in his official legisla-
tive and representational duties. 13
The issue of representation under § 205 has arisen in relation to the
filing of a law suit against the United States and specified officers by a
legislative aide to a Representative on behalf of the Member and cer-
tain constituents. The suit concerned the alleged illegality of the im-
'» 175 F.2d 994, at 999, 1006.
» 419 F.2d 56, 60.
12 436 F. Supp. 1039, 1042.
13 See, for example, Legislative Appropriations Act of 1978, P.L. 95-94, 91 Stat. 653.
32
poundmeiit of certain funds designated for use within the Congress-
man's district. According to a report in the press, the congressional
aide was warned by an Assistant Attorney General of the United States
that he was "under investigation for possible violation of a law against
government officials bringing claims against the government", 14 that
is, 18 U.S.C. § 205. Seeking clarification of the issue, the Congressman
requested an opinion from the House Committee on Standards of
Official Conduct. In response to this request the Committee issued an
advisory letter which dealt generally with the representative respon-
sibility of a Member of the House to his constituents, and which was
specifically of the opinion that the activities of the legislative aide were
"in the proper discharge of his official duties" since such were under the
direction of the Member to assist him in guaranteeing representation
of his constituents. The letter stated specifically :
Research into the legislative history of 18 U.S.C. § 205
indicates to us that the statute prohibited private representa-
' tional activity. Since you directed [your legislative assistant]
to file suit for yourself as a Congressman and to guarantee
representation of your constituents, it is clear that [the
legislative assistant] was not acting in a private manner. He
was acting in a manner to assist you in representing your
district. This is no different than your staff acting as agents
for your constituents to assist them in obtaining other vested
benefits. We regard this as entirety proper. 15
Prohibited Ex Parte Communications. The "Government in the
Sunshine Act" 16 enacted in 1976 contains a provision which prohibits
in certain circumstances "ex parte communications" with administra-
tive agencies. Ex parte communications are oral or written communica-
tions made without proper notice to all parties and not on the public
record, from an interested person outside of the agency to a member of
the agency, an administrative law judge, or to an employee involved
in the decision-making process. 17 This provision works to prohibit a
congressional office from making an ex parte communication to an
agency on behalf of a constituent concerning the merits of an issue
which is subject to formal agency proceedings, 18 basically those of a
"quasi-adjudicatory" nature or those rule making proceedings which
must include formal hearings and a decision on the record.
The legislative history of the Government in the Sunshine Act
shows that "the prohibition only applies to formal agency adjudica-
tion. Informal rulemaking proceedings and other agency actions that
are not required to be on the record after an opportunity for a hearing
will not be affected by the provision." 19 Thus, congressional offices
may apparently make communications to an agency on behalf of a
constituent concerning those matters not subject to formal agency
proceedings. However, it should be noted that some communications,
even if related to matters not in a formal agency proceeding, may
become part of a public record concerning that matter in the interest
" See Washington Star, March 19, 1974, p. A3.
'« Note No. 2, infra.
M Public Law 94-409, Section 4.
"5 U.S.C. §551(14).
•» Proceedings subject to 5 U.S.C. § 557(a).
»• 8. Rpt. No. 94-354, 94th Congress, 1st Session, p. 35; see also Conference Report, S. Rpt. No. 94-1178,
94th Congress, 2d Session, p. 29.
33
of fairness under various agency regulations, and under a recent deci-
sion by a United States Court of Appeals. 20
The statutory proscription on communicating to agencies concerning
a formal agency proceeding applies to communications on the merits of
the issue in question, and thus would not extend to inquiries on the
status of a proceeding 21 nor to "general background discussions about
an entire industry which do not directly relate to specific agency
adjudication involving a member of that industry, or to formal rule-
making involving the industry as a whole." 22 As stated in the House
Report on the Government in the Sunshine Act: "While the prohibi-
tions on ex parte communications relative to the merits apply to
communications from Members of Congress, they are not intended to
prohibit routine inquiries or referrals of constituent correspondence." a
It should be noted, however, that both the House and Senate re-
ports recognized the possibility that background information or a
request for a status report "may in effect amount to an indirect or
subtle effort to influence the substantive outcome of the proceedings",
and thus in doubtful cases should be treated by agency personnel as an
ex parte communication "to protect the integrity of the decision-
making process." 2i
To meet the requirement of the statutory provisions against ex
parte (one-sided) presentations to agencies, the safest procedure is to
put the arguments in writing and request that they be made a part
of the record and open for the information of all interested parties and
the public.
Undue Influence, Fraud. Undue influences upon the administrative
process may result from some congressional interventions into ongoing
administrative proceedings. Early in the 1950's the late Senator Paul
Douglas, in discussing general ethical considerations in congressional
interventions in administrative proceedings, noted that a legislator
"should not try to intimidate the officials involved and he should
make it clear that the final decision is in their hands." 25 Lower Federal
court cases have held that certain congressional interference with an
ongoing administrative proceeding may so unduly influence the pro-
ceeding that the decision reached by the agency will be nullified by
the court because of considerations of due process and fairness towards
the parties to the proceeding. 26 The congressional interference which
led to the court's nullification of an agency decision in the case of
PUlsbury v. F.T.C., 354 F. 2d 952 (5th Cir. 1966), concerned the
questioning of agency officials in congressional hearings regarding
the reasons or rationale for deciding an issue still pending before the
officials in a formal setting.
There is no statutory provision stating a specific prohibition against
the use of undue or improper influence or pressure upon a Federal
agency. However, in more extreme cases one's conduct could possibly
result in an indictable offense. In 1970 a United States District Court
sustained an indictment against two individuals, one a congressional
=o Home Box Office v. F.C.C., 567 F. 2d 9 (1977), cert. den. 46 LW 3190 (1977); but see also Action For Chil-
dren's Television v. F.C.C., 564 F. 2d 458 (1977).
»i 5 U.S.C. § 551(14); see S. Rpt. 94-1178, supra at p. 29.
" H. Rpt. No. 94-380, Part I, at pp. 20-21.
*» Td. at 21-22.
2 « Id. at 20-21; see S. Rpt. 94-354, supra at p. 37.
25 Douglas, supra at d. 90.
28 PUlsbury v. F.T.C., 354 F. 2d 952 (5th Cir. 1986): see also DC. Federation of Civic Associations v. Volpe,
459 F. 2d 1231 (D.C. Cir. 1971), cert. den. 405 U.S. 1030 (1972).
34
aide, for conspiracy to defraud the United States concerning the
exertion of "dishonest, unlawful, impaired and undue pressure and
influence" upon Federal administrators. The court in the case of
United States v. Sweig, 316 F. Supp. 1148 (1970), sustained count one
of a grand jury indictment charging the defendants with a violation
of the Federal conspiracy statute, 18 U.S.C. § 371. The indictment
specifically charged that defendants conspired:
with each other and with other persons to the grand jury
known and unknown, to defraud the United States and
agencies thereof, in connection with its lawful governmental
functions hereinafter described, to wit: (a) its lawful function
to have its business and affairs conducted honestly and im-
partially as the same should be conducted, free from fraud,
improper and undue influence, dishonesty, unlawful impair-
ment and obstruction; (b) its lawful right to have its officers
and employees, free to transact the official business of the
United States unhindered, unhampered, unobstructed, unim-
paired and undefeated by the exertion upon them of dis-
honest, unlawful, impaired and undue pressure and influence.
The indictment charged that defendants had misused the office and
influence of the Speaker of the House and had pressured various
Federal agencies and their employees by stating that they represented
the Speaker, and the Speaker was personally interested in a certain
matter pending before the agency. As stated by Count One of the
Grand Jury indictment :
: 5. Among the means by which defendants and their co-
conspirators would carry out their unlawful purpose were the
following :
(a) The defendants, Nathan Voloshen and Martin Sweig
would and did make telephone calls from the office of the
Speaker of the House and elsewhere to various officers and
employees of the United States of America expressing the
interest of the office of the Speaker of the House in said
matters pending before said agencies.
(b) Nathan Voloshen and Martin Sweig the defendants,
would and did visit personally the offices of various officers
and employees of the United States of America and express
the interest of the office of the Speaker of the House in said
matters pending before said agencies.
Nathan Voloshen pleaded guilty to one count of conspiracy and
three counts of perjury. Martin Sweig, who, unlike Voloshen, was
actually in the employ of the office of the Speaker, was acquitted by a
jury on the "influence peddling" conspiracy charges, but was found
guilty on one charge of perjury. As reported by the press on July 10,
1970:
The verdict was a personal triumph for defense counsel
Smith, who argued that Sweig's efforts in contacting federal
agencies were a customary practice on Capitol Hill and not
unlawful even if the jurors might find the practice unfair. 27
« See Washington Post, July 10, 1970, p. Al,
35
Earlier, the press had quoted Sweig's defense attorney concerning
the Congressional ethics of intervening for individuals before a Federal
agency :
Congress has never made criminal the acts alleged against
Sweig, says Smith. It would be presumptuous in the ex-
treme and in clear violation of constitutional separation of
powers for the judiciary to impose standards of conduct on
legislative employees when the Congress has declined to
do so. 28
Congressional Standards. Although it may have been argued that
there were no apparent congressional standards of conduct concerning
contacts with agencies at the time of the alleged activities of Sweig
and Voloshen, the House Standards of Official Conduct Committee
issued an advisory opinion on January 26, 1,970, specifically setting
guidelines and standards of conduct for communicating with executive
and independent agencies of the Federal Government. The opinion
basically states that an appropriate course of conduct would be to
introduce an individual to an agency and arrange interviews and meet-
ings for the individual; to provide a character reference for the
individual or parties involved; and to urge prompt and fair considera-
tion of the matter on the merits of the case. Inquiries as to the status
of a proceeding or ruling may be directed to an agency or department,
and reconsideration, arguably supported by an interpretation of Fed-
eral law, regulation, or legislative intent, may be requested. If a
Member has a strong feeling about a particular case, judgment' upon
the merits of the case may be expressed or argued, subject, of course,
to the prohibitions and restrictions on ex parte communications con-
cerning formal agency proceedings. If arguments are presented, no
direct or indirect threat of reprisal, or promise of favoritism or benefit
should be suggested or inferred.
The standards expressed by the Committee on Standards of Official
Conduct state specifically as follows:
REPRESENTATIONS
This Committee is of the opinion that a Member of the
House of Representatives, either on his own initiative or at
the request of a petitioner, may properly communicate with
an Executive or Independent Agency on any matter to:
request information or a status report;
urge prompt consideration;
arrange for interviews or appointments;
express judgment;
call for reconsideration of an administrative response
which he believes is not supported by established law, Fed-
eral Regulation or legislative intent;
perform any other service of a similar nature in this area
compatible with the criteria hereinafter expressed in this
Advisory Opinion.
a Sen Washington Post, February 25, 1970, p. A 10.
36
PRINCIPLES TO BE OBSERVED
The overall public interest, naturally, is primary to any
individual matter and should be so considered. There are also
self-evident standards of official conduct which Members
should uphold with regard to these communications. The
Committee believes the following to be basic :
1. A Member's responsibility in this area is to all his
constituents equally and should be pursued with diligence
irrespective of political or other considerations.
2. Direct or implied suggestion of either favoritism or re-
prisal in advance of, or subsequent to, action taken by the
agency contacted is unwarranted abuse of the representative
role.
3. A Member should make every effort to assure that
representations made in his name by any staff employee con-
form to his instruction. 29
The Committee's Advisory Opinion noted as a "clear limitation"
on representation, the acceptance of compensation for such service as
prohibited at 18 U.S.C. §|J03. Additionally, it should be noted that
after the issuance of the Aavisory Opinion another "clear limitation"
has been enacted into law, that is, the prohibition on ex parte com-
munications from interested persons to an agency concerning the
merits of a matter subject to formal agency proceedings, as stated
within 5 U.S.C. § 557(d).
Recommendations for Employment in the Competitive Service.
Members of Congress are often requested to recommend a constituent
for employment in the Federal Government. The regulatory and stat-
utory framework of the merit system does not work to prohibit the
making of recommendations or referrals by a congressional office on
behalf of a Federal job seeker. However, although such referrals may
be made, the statutes and regulations relating to merit selection in
the competitive service specifically prohibit a Federal officer with
authority to appoint persons in the service from considering the
political affiliation of an applicant in his decision to hire, 30 or from
considering the recommendation made by a Member of Congress
except as to the character or residency of the applicant. 31
Employment in the competitive service of the Federal Government
is intended to be based upon the "merit system." 32 Briefly, a register
of eligibles is maintained by the Office of Personnel Management
consisting of the names of all applicants who have qualified in examina-
tions for competitive service. 33 in general, an appointing officer of an
agency or department may exercise his own discretion to a great degree
in choosing an "eligible" from the register to fill a vacancy within
that agency. 34 The appointing officer, however, may exercise this
discretion, and make his choice, solely on the basis of merit and fitness
of the applicant. 35 Further, such discretion may not be exercised in an
arbitrary or capricious manner. 36
« House Committee on Standards of Official Conduct, Advisory Opinion No. 1, issued January 28, 1970.
m See Executive Order No. 10577, section 4.2, see now 5 U.S.C. §2301, 5 U.S.C. § 2302(b) (1), (3), P.L.
95-4.54.
*i 5 U.S.C. § 3303; see also 5 U.S.C. § 2302(b)(2), P.L. 95-154.
3- See 5 U.S.C. § 2301, P.L. 95-154.
33 5 U.S.C. § 3313; see 5 U.S.C. § 3304.
M5C.F.R. §330.101; 5 U.S.C. §3318.
35 5C.F.R. §330.101,332.404.
»« Blackman v. United States, 354 F. 2d 340 (1965).
Compliance with the general regulations concerning appointments
and selections into the Government service by an appointing officer
would apparently rule out the selection of an applicant on a basis
other than merit and fitness, such as on the basis of a personal recom-
mendation by a Member of Congress. These regulations apparently
do not, however, rule out the consideration of a "character reference"
as one factor in determining the fitness of an applicant. Undue
pressure or influence upon a hiring authority concerning a recommenda-
tion or a referral may, however, entail an unlawful circumvention of
the merit system.
The statutory provision on congressional recommendations into the
competitive service, 5 U.S.C. § 3303, states simply that "An individual
concerned in examining an applicant for or appointing him in the com-
petitive service may not receive or consider a recommendation of the
applicant by a Senator or Representative, except as to the character
or residence of the applicant." The effect of this statute on recom-
mendations given by and received from congressional offices was
summarized by the Civil Service Commission in its "Report on Alleged
Political Influence in Personnel Actions at the General Services
Administration", September, 1973:
To put these findings and conclusions in proper perspective,
it is necessary to understand that there is nothing wrong in
the act of a member of Congress or any other' partisan source
referring an individual to a Federal agency for possible
employment. This is so whether the referred individual is
Republican or Democrat, constituent or stranger, and regard-
less whether referrer and referred are or are not members of
the same political party. 5 U.S.C. 3303 states "An individual
concerned in examining an applicant for or appointing him in
the competitive service may not receive or consider a recom-
mendation of the applicant by a Senator or Representative,
except as to the character or residence of the applicant."
This provision is not a ban on referrals, and actually antici-
pates that referral will be made. What this statute restricts
is not communications or referrals, but the reception the
appointing official is free to give to referrals. Accordingly, the
simple use of a political party label to condemn the otherwise
innocent activities of the referrer who bears that label cannot
be substituted for a demonstration that politics influenced
or was intended to influence any of those activities.
Recommendations for Employment in the Postal Service. Guide-
lines have also been established by statute with respect to the selection
of employees for the Postal Service. In addition to prohibiting the
receipt or consideration of congressional recommendations as in the
competitive service provisions, the Postal Service statute at 39 U.S.C.
§ 1002 also prohibits Members of Congress from "making or trans-
mitting" recommendations to the Postal Service other than statements
as to the character or residence of the applicant, except upon the
request of the Postal Service or upon request of an authorized repre-
sentative of the Government for purposes of determining loyalty or
character.
38
General Statutory Prohibitions. In regard to Federal employment
or appointment, statutory law prohibits generally any candidate from
promising the appointment or the use of his influence in appointing
someone to any public or private post in return for the support of
one's candidacy; 37 prohibits anyone from promising employment or
other benefit, or special consideration in obtaining such employment
or benefit provided for or made possible in whole or in part by an act
of Congress, in return for political activity or support; 38 prohibits
the denial or the threatening of any Federal employment or employ-
ment made possible through Federal funds as a means of securing
political contributions from any person; 39 and prohibits the receipt
of anything of value in return for the promise of support or use of
influence in obtaining someone a Federal post. 40
"18U.S.C. §599.
'«18U.S.C.§600. . - . .
"18U.S.C.§601.
"18U.S.C. §211.
Chapter 5. THE FRANKING PRIVILEGE
Highlight
A Member's frank is to be used only to mail material relating to
the official duties, activities, and business of a congressional office.
The frank may be used for such items as:
— constituent mail relating to public issues ;
— press releases, newsletters, and questionnaires;
— mail to other legislators or government bodies;
— Federal publications, laws, regulations, the Congressional
Record.
The frank may not be used for such items as :
— political or personal maij matter )•- ;•*' •/
— the solicitation of any funds ; ' " ;
— holiday greeting cards, greetings from og reports on a Member's
family. j; *• . •
A Member's frank may not, be loaned to x any person or organization
other than official congressional' "committees as authorized in the
franking law.
A Member's staff engaged in sending out mail matter should:
— be familiar with the franking regulations issued by the House
Commission on Congressional Mailing Standards;
— seek advice and consultation on questions of frankability of
mail matter from the Commission on Congressional Mailing
Standards ;
— submit a sample of proposed "postal patron" mail to the
Commission on Congressional Mailing Standards for an advi-
sory opinion;
— Observe the restrictions on the timing, source of financing,
number, and permissible geographical area covered concerning
mass mailings and postal patron mailings.
(39)
Chapter 5. THE FRANKING PRIVILEGE
Members of Congress, each of the elected officers of the House, and
the Legislative Counsel of the House are authorized to send as
"franked" mail, material relating to the official business, duties,
and activities of their office. 1 The term "frank", which is derived from
the latin word "francus" meaning "free", 2 denotes the autograph or
facsimile signature of a person authorized to transmit matter through
the mail without prepayment of postage. 3
Criminal penalties are provided in the United States Code for
misuse of the franking privilege, that is, for using a franked envelope
or endorsement to avoid paying postage on a private letter or package. 4
Additionally, a misuse of the frank of a Member by a staff employee
may be imputed to the Member, 5 which may result in a complaint
against the Member and/or the payment of restitution to the Treasury
for the cost of an intentional or negligent improper use of the franking
privilege. 6
The House Commission on Congressional Mailing Standards, which
is authorized to give advisory opinions on the frankability of mail
matter, as well as to issue regulations and hear complaints on the
franking privilege in the House, suggests that each Member of the
House "assign a staff member familiar with the franking laws and
regulations to supervise preparation of the mailing so that obvious
violations of the franking laws are avoided before submitting the
material for an advisoiy opinion." 7 As to the responsibilities of staff
members concerning the franking privilege of a Member, the Com-
mission on Congressional Mailing Standards has stated the following
in its published regulations:
RESPONSIBILITY OF MEMBER'S STAFF
The actual determination of whether or not to send a
particular piece of mail under a Member's frank probably
will be made by his staff who prepare his mail for delivery.
An improper use of the frank by a staff member, ranging
from an inadvertent mistake or a willfull abuse on a single
letter or a mass mailing, will be imputed to his Member,
under most circumstances. To help avoid these violations of
the franking law, with all of their resultant possible penalties
and the reflections on the effective administration of his office,
a Member should reasonably assure that his staff knows what
kinds of mail are frankable by providing for the training
139U.S.C. § 3210(b)(1).
2 Black's Law Dietionery, 4th Ed. 1968, p. 787.
3 39 U.S. C. §3201.
* 18 U.S.C. § 1719.
5 Regulations of the House Commission on Congressional Mailing Standards, Feb. 1979 (Hereinafter
referred to as "Regulations"), Chapter 1, para. 8.
9 Regulations, Chapter 2, para. 19.
7 Franking Regulations, p. 23, Pursuant to Rule XLVI, Rules of the House, as Contained in H. Res. 287.
(40)
41
a.nd supervision of these employees and their familiarization
with these regulations. Members should encourage their staff,
especially in the case of mass mailing, to consult with and seek
the advice of the commission to the greatest extent possible. 8
Authorization to Use the Frank. In addition to the grant of the
franking privilege to Members of Congress, House officers, and the
House Legislative Counsel, the surviving spouse of a Member, if the
Member dies during his term of office, is authorized to use the frank
for up to 180 days following the Member's death. 9 Members of Con-
gress and others who have been granted the franking privilege may
use the frank for 90 days following the date on which they leave
office to close the official business of the congressional office. 10
Material relating to the official business of a committee of the House
may be sent under the frank of the chairman of the committee, the
ranking minority member of the committee, subcommittee or congres-
sional commission. 11 As noted in the regulations of the Commission on
Congressional Mailing Standards, the authorization to use the franking
privilege of a Member extends to "official" committees created by
Congress and made up exclusively of Members, but does not extend
to "informal" or "ad hoc" groups of Members, "whose business
relates to political, party policy, or special interest matters." 12
The franking law specifically prohibits the loaning of a Member's
frank to any group, organization, or person ether than the official
congressional committees noted above or the Republican conference
or Democratic caucus of the House. 13 The regulations on the frank
also note, under the rules concerning the prohibition of loaning of the
frank, that there is no authorization for providing a franked envelope
to members of the public for return mail to a Member or committee
of Congress. 14
General Standards of Frankability. Basically, the congressional
franking privilege is available only for the transmittal of material of
an official legislative nature, and material which is purely personal or
political may not be sent under the frank of the Member or congres-
sional officer. The franking statute expresses Congress' intent to allow
mail matter to be sent under the frank which concerns "the official
business, activities, and duties of the Congress", entailing all matters
which "directly or indirectly pertain to the legislative process or to any
congressional representative functions generally." 15
The franking law and the regulations promulgated under it by
the Commission on Congressional Mailing Standards note that the
usual and customary newsletter, news release, or questionnaire,
relating to official activities or public issues, are those types of items
which may be sent under the franking privilege. The regulations of the
Commission go into some detail on guidelines and requirements as to
the permissible contents of newsletters and news releases. The regula-
tions caution Members, for example, on the excessive use of per-
sonally phrased references (Member's name, "I", "me", "the Con-
gressman") in newsletters and other mass mailings, recommending
8 Regulations, Chapter 1, para. 8.
9 39 U.S.C. §3218.
i»39 U.S.C. 13210(b)(3).
11 Regulations, Chapter 1, para. 4.
« Id.
'3 39 U.S.C. §3215.
M Regulations, Chapter 1, para. 5.
'=39 U.S.C. § 3210(a)(2).
42
that such phrases generally be limited to an average of eight times in
the text of a page. 16 The regulations further provide guidelines on the
permissible number and size of pictures or sketches of the Member in
newsletters, releases, meeting notices or other mass mailings, stating
that a photograph may be part of the masthead of a mailer, but that it
should not cover more than 6 percent of the page, up to a maximum of
six square inches. 17 Further, the regulations provide that newsletters
should contain not more than two pictures on any one page, not
exceeding 20 percent of the page, 18 and that the pictures should relate
to the text of the material rather than merely to advertise the
Member. 19
The Commission's regulations provide examples of items which are
frankable (voting records, Member's positions, itineraries, statements
of financial disclosure) and those which are non-frankable (auto-
biographical material, political material such as references to future or
past campaigns, announcements of filing for reelection, campaign
schedules, or personal reports of a Member or his family) in a news-
letter or news release. 20
In addition to the mailing of official material relating to congres-
sional business or public concerns under the frank, the laws and regu-
lations note that biographical material or pictures of the Member may
be sent under the frank when specifically requested, or when part of a
Federal publication. 21 Non-partisan voting information may also be
sent under the frank. 22 Another common item which may be sent under
the frank is congratulations on an achievement or condolences. 23
However, holiday greetings are specifically prohibited from being
sent as franked mail. 24 It should be noted that legislation is pending
in the 96th Congress that would eliminate the specific authorization
to send under the frank mail expressing condolences or congratulations.
Summary of Guidelines Under the Frank. Following is a summary
listing of those items noted in the franking statutes as examples of
either frankable on non-frankable mail matter. 25 As noted above, the
regulations promulgated by the Commission on Congressional Mailing
Standards have established detailed requirements and guidelines
concerning some of the items listed below, and have provided examples
of permissible or non-permissible items under the various headings.
FRANKABLE MAIL MATTER
1. Mail to any person and to any government agency relating to
matters and programs of public concern and Congressional actions
(39 U.S.C. § 3210(a) (3) [A]).
2. Newsletters and press releases dealing with the impact of laws
on governments and the public, official action of Members, discus-
sions of proposed or pending legislation, and positions of Members
on, and arguments for and against such matters (39 U.S.C. § 3210
(a)(3)[B]); see regulations of Commission on Congressional Mailing
Standards for examples of frankable and non-frankable items in
'« Regulations, Chapter 2, para. 4.
17 Regulations, Chapter 2, para. 4(c).
is Id.
i»Id.
20 Regulations, Chapter 2, para. 4(b).
si 39 U.S.C. § 3210(a) (3) (J).
22 39 U.S.C. § 3210(a)(3)(H).
23 29 U.S.C. § 3210(a)(3)(F).
2*39 U.S.C. §3210(a)(5)(iii).
2 « See H. Rpt. No. 93-98, 93d Congress, 1st Session.
43
newsletters, guidelines on use of personal references to the Membe-
and pictures or sketches of Member in newsletters).
3. Questionnaires seeking public opinion (39 U.S.C. § 3210(a)(3)[C]).
4. Mail between a Member's various Congressional offices (39
U.S.C. §3210(a)(3)[D]).
5. Mail to other Members of Congress and all other legislators
(39 U.S.C. §3210(a)(3)[E]).
6. Mail expressing condolences or congratulations to a person who
achieved some personal or public distinction (39 U.S.C. § 3210(a)
(3)[F1).
7. Mail consisting of Federal regulations, or other publications
containing general information (39 U.S.C. § 3210(a) (3)[G]).
8. Mail containing non-partisan voter registration or election
information (39 U.S.C. § 3210(a) (3) [HJ).
9. Mail containing biographical material in Federal publications
or in response to specific requests and not included in newsletters or
other mass mailings (39 U.S.C. § 3210(a) (3)[I]).
10. Mail consisting of pictures in Federal publications or in response
to a specific request therefor, and, if in a newsletter, not of such size
and frequency which would advertise the Member rather than to
illustrate the accompanying text (39 U.S.C. § 3210(a) (3) [J]); see
regulations of Commission on Congressional Mailing Standards as to
guidelines and requirements for pictures and sketches of Member in
11. The Congressional Kecord (39 U.S.C. § 3212a).
12. Excerpts from the Congressional Record if such material in-
dependently meets the test of frankability (39 U.S.C. § 3212b).
13. Mailgrams, if the contents meet the test of frankability . (39
U.S.C. §3219).
14. Reprints, copies, reproductions, facsimiles or recordings of
frankable matter may be sent under the frank (39 U.S.C. § 3210(c)).
15. Public documents printed at the order of Congress (39 U.S.C.
§3211).
16. Seeds and agricultural reports (39 U.S.C. § 3213).
NONFRANKABLE MAIL MATTER
1. Mail matter containing laudatory and complimentary articles or
texts concerning Members on a personal basis rather than based on
official duties or activities of a Member (39 U.S.C. § 3210(a) (5)[AJ).
2. Mail matter containing greetings from a Member's family (39
U.S.C. § 3210(a) (5) (B)[ij).
3. Any card expressing holiday greetings (39 U.S.C. § 3210(a)
(5)(B)[iii]).
4. Mail matter containing reports of a Member or his family's
activities other than in connection with official functions and activities
of the Member (39 U.S.C. § 3210(a) (5) (B)[ii]).
5. Mail matter containing solicitations for political support for the
sender or any person or party or a vote or financial assistance for any
candidate (39 U.S.C. § 3210(a) (5)[C]); see regulations of the Com-
mission on Congressional Mailing Standards concerning references to
upcoming campaigns, filings for reelection, expressions of gratitude for
election, etc. as nonfrankable items in newsletter or news releases.
6. Mail matter which is purely personal to the sender or to any other
person (39 U.S.C. § 3210(a)[4]).
7. Any solicitations of funds. (2 U.S.C. § 439b).
44
Mass Mailing. Special requirements and regulations are applicable
to franked mailings which are to be sent out in a "mass mailing." The
term "mass mailing" is defined to mean a mailing of 500 or more pieces
which are substantially identical in content. 26
Rules of the House of Representatives require that the cost of
preparing and printing a mass mailing may be defrayed only from
appropriated funds. 27 The House Rule also restricts the sending of
franked mass mailings by a Member who is a candidate for a state-
wide office only into the area constituting the congressional district
from which the Member was elected. 28
Restrictions are also in effect concerning the timing of mass mailings
under the frank. The Rules of the House of Representatives now
prohibit the sending of any mass mailings under the frank during the
sixty days immediately before any primary or general election in which
the Member making the mailing is a candidate. 29
Postal Patron Mail. Mass mailings are often sent out under a
simplified form of address which is known as postal patron mail. When
a postal patron mailing is made under the frank, such mailing may be
sent only into the congressional district from which the Member was
elected, or into a congressional district which has been redistricted by a
legislative body or by judicial decision, so long as some portion of the
old district from which a Member was elected is included in the new
district. 30
Additional restrictions have been placed upon franked postal
patron mailings by the Rules of the House of Representatives. Under
the House Rules, a Member is restricted in the amount of mail he may
send under the frank with a simplified form of address. The total
number of pieces which may be franked in this form during a calendar
year cannot exceed an amount equal to six times the number of
addresses to which such mail may be delivered in the area from which
the Member was elected. 31 Exceptions are made to this limit for notices
of appearances or a scheduled itinerary of -a Member in the district
(but not appearances of staff employees only). Such notices or itinerar-
ies will not be counted against a Member's limit for postal patron
mailing. 32
Finally, before a postal patron mailing is made, the House Rules
require that a sample or description of the material to be mailed be
submitted to the Commission on Congressional Mailing Standards
for an advisory opinion and determination on the frankability of the
material. 33
Commission on Congressional Mailing Standards. The revision of
the franking laws passed in 1973 established the Commission on Cong-
gressional Mailing Standards in the House. 34 This Commission is
available to staff for questions and consultation concerning the frank-
ing privilege, and is authorized to give advisory opinions concerning
the frankability of particular mail matter. 35 In fact, the Rules of the
2«39U.S.C. § 3210(a)(5)(D).
=' House Rule XLVI(4).
^ House RuleXLVI(5).
2« House Rule XLVI(6).
3»39 U.S.C. § 3210(d).
3' House RuleXLVI(2).
32 Id.
33 House RuleXLVI(3).
3< P.L. 93-191, Sec. 5(a).
35 P. L. 93-191, Sec. 5(d).
45
House of Representatives presently require, as noted above, that
before any "postal partron" mailing is made into a congressional dis-
trict, a sample or description of the material to be mailed must be
submitted to the Commission for an advisory opinion on the frank-
ability of the material.
The Commission on Congressional Mailing Standards has issued
regulations on the use of the frank in the House. These regulations go
into detail concerning the guidelines and requirements for franked
mail and provide examples of permissible or impermissible items or
mailings, citing and summarizing decisions and advisory opinions of
the Commission. The "Regulations on the Use of the Congressional
Frank by Members of House of Representatives" are available from
the Commission and should be examined and consulted by congres-
sional employees involved in mailing material under the franking
privilege.
Complaints on abuses of the franking privilege are to be made to
the Commission for investigation and possible hearing on the matter. 39
The franking statute provides that no court may entertain a civil suit
on abuses of the frank except as judicial review of the decisions of the
House Commission on Congressional Mailing Standards. 37
*> P.L. 93-191, Sec. 5(e).
Chapter 6. GIFTS, ENTERTAINMENT, AND FAVORS
Highlight
Members and employees of the House may not:
—receive gifts totalling over $100 in a year from anyone, such as
.a lobbyist, who has a direct interest in legislation before. Con-
gress, or from a foreign national or his agent. Gifts of over $35
will be included for the aggregate yearly limit;
. .-—receive any gift from a foreign government, unless it is a souve-
nir or mark of courtesy of minimal value ($100 or less), or
meets other special circumstances approved by the Congress;
. — receive favors or benefits in circumstances that might raise
.,. suspicions and create the appearance of influencing the per-
formance of official duties;
— rreceiye any bribe, that is, anything of value in return for being
influenced in, or as a reward for, performing official duties.
Members of the House may not treat receipts from fundraisers or
testimonials as unrestricted personal gifts ; but rather must treat such
receipts as campaign contributions which may not be used for personal
or official congressional purposes.
Members and employees of the House have generally been cau-
tioned to:
— be wary of any gifts, entertainment, or favors offered to them
by persons who are not relatives, or personal friends, but which
are apparently offered solely because of one's employment or
position in the Congress;
— be aware of the identity of any gift giver, his relationship to
the Member or any official business, and his possible motives;
— be particularly cautious concerning the receipt of gifts over
$35 in value, or gifts from any one source during a year which
total over $100 in value.
Members and certain House employees must:
—file annual financial disclosure reports which will reveal the
source and value of certain gifts received over specified amounts
by the employee, his spouse and dependent children.
(47)
Chapter 6. GIFTS, ENTERTAINMENT, AND FAVORS
Considering the representative nature of congressional office, it is
natural that pressures and influences will be exerted upon Members
and employees of Congress by concerned constitutents and interest
groups exercising their powers of political persuasion, explanation,
or argument on the merits of an issue to further a particular cause or
concern. Aside from such legitimate pressures from persuasion, argu-
ment and political realities, however, there are types of conduct and
activities tending to influence governmental officers or employees
which raise serious ethical and legal questions. Such suspect activities
include the bestowing of gifts, entertainment, and special favors upon
governmental decision-makers and their advisors by those with special
interests in governmental decisions. Ethical problems may be en-
countered in these situations even when the tender or receipt of things
of value would not rise to the level of a technical "bribe" under Federal
statutory law.
In a committee print entitled "Ethical Standards in Government",
a Senate subcommittee headed by the late Senator Paul H. Douglas,
in 1951, discussed general ethical considerations concerning the pro-
priety of the receipt of gifts by public officials :
The line between the proper and improper begins to be less
certain when one looks for a consensus of opinion as to favors,
gifts, gratuities, and services. The exchanging of gifts and
favors is reported to be rather general in the business com-
munity. What is it proper to offer public officials and what
is it proper for them to receive? A cigar, a box of candy, a
modest lunch (usually to continue discussing unfinished
business)? Is anyone of these improper? It is difficult to
believe so. They are usually a courteous gesture, an expres-
sion of good will, or a simple convenience, symbolic rather
than intrinsically significant. Normally they are not taken
seriously by the giver nor do they mean very much to the
receiver. At the point at which they do begin to mean some-
thing, however, do they not become improper? Even small
gratuities can be significant if they are repeated and come
to be expected. But here, too, convention must be con-
sidered : gifts to school teachers a^e now generally forbidden
by law, but a Christmastime present for the postman, usually
on engraved green paper, is almost as well established as
holly.
Expensive gifts, lavish or frequent entertainment, paying
hotel or travel costs, valuable services, inside advice as to
investments, discounts and allowances in purchasing are in an
entirely different category. They are clearly improper. On
this, there is substantial agreement in the governmental
community, and any one who thinks them proper must have
(48)
49
already lost his perspective. The difficulty comes in drawing
the line between the innocent or proper and that which is
designing or improper. At the moment a doubt arises as to
propriety, the line should be drawn. Innocence is perhaps lost
when one is conscious that it exists. 1
Congress has recognized the general premise that "public office
is a public trust." 2 Members of Congress thus hold office to represent
the interests of the "beneficiaries" of their trust, that is, the general
public whom they were elected to serve. Similarly, Government
employees, such as employees of the House, paid from funds of the
United States Treasury, are retained to represent the interests of
the general public rather than personal, private or special interests.
As. public servants, Members of Congress and congressional employees
are expected to exercise impartial judgment in performing their public
duties. 3 The receipt of gifts, entertainment, favors and things of
value by Members or employees of Congress from certain persons or
special interests may interfere with the impartial judgment and per-
formance of official duties, and may derogate from that public trust
inherent in a Government position, in two fundamental ways.
Initially, a gift to a Member or an employee may create a conflict
of interest for the recipient. This may be the case of a gift of stocks
or othei interests in a business to the Member or employee or to the
Member's or employee's spouse or dependent children, or the sale of
stock to such persons at discount or bargain prices. When matters
affecting the donor's business or industry arise in an official capacity,
the recipient Member or employee may then be favorabty influenced
in his official conduct towards that industry because of his personal
financial holdings. As noted in a study of congressional ethics: "The
giver's purpose is usually to create a situation in which the Member
has a personal economic stake in common with the giver. Self-interest
can then take its course." 4
This type of ethical problem in gift giving and receiving was the
basis for an early congressional scandal when stocks of the Credit
Mobilier Corporation were distributed at considerably below market
value to several congressmen during the 1860's. The major congres-
sional participants in the scheme were subject to disciplinary pro-
ceedings in the Congress. 5
The receipt of gifts by Members or employees of Congress raises
another ethical problem because of the normal sense of gratitude and
appreciation in the recipient of a gift, and the expectations of favorable
treatment or consideration which may arise in the giver. This is the
more common ethical problem in gift giving and may arise with even
token gifts, favors or entertainment, particularly those that are given
with some frequency or regularity. Even when no immediate or
specific "quid pro quo" is sought by a gift giver, the sense of gratitude
or appreciation in the recipient-Member or employee may pre-dispose
him to act more favorably towards the gift giver in some future
1 Report of a Subcommittee of the Committee on Labor and Public Welfare, United States Senate, 82d
Congress, 1st Session, "Ethical Standards in Government", p. 23.
2 72 Stat, part 2, p. B 12, H. Con. Res. 175, July 11, 1958, "Code of Ethics for Government Service."
8 Id. at para. 5; see also United States v. PodeU, 436 F. Supp. 1039, 1042 (S.D.N.Y. 1977), affd 572 F. 2d 3
(2d Cir. 1978).
4 "Congress and the Public Trust," Association of the Bar of the City of New York, James C Kirby, Jr.,
Executive Director, New York 1970, p. 179.
5 See: House of Representatives Exclusion, Censure and Expulsion Cases from 1789 to 1973, Committee
Print prepared for the Joint Committee on Congressional Operations, 93rd Congress, 1st Session, pp.
123-125.
50
situation or be influenced by a sense of obligation or loyalty to his
"benefactors" and "friends" who have done him favors. 6
Regardless of any actual corruption or undue influence upon a
Member or employee of Congress, the receipt of gifts, entertainment,
or special favors by Members or staff from private or special interests
may affect the public confidence in the integrity of the institution
of the Congress as a whole, and in government in general, as well as
the integrity of the individual Member involved. Legitimate concerns
of partiality or favoritism, or abuse of one's public position or in-
fluence,, may be raised by constitu tents who discover that a Member
or his staff has been given expensive gifts by lobbyists or other rep-
resentatives of special interests.
Members and employees of the House have thus been cautioned to
exercise discretion concerning the receipt or acceptance of any gifts,
favors and entertainment from persons who are not family members
or personal friends, particularly from those persons representing
special interests. It has been suggested that recipients of gifts be par-
ticularly sensitive to, and cognizant of, various factors concerning
gifts or entertainment, such as the source and value of the gift, the
frequency of gifts from that source, the relationship of the gift giver
to the Member, committee, or to any official business or legislation
pending, and the possible motives of the donor of the gift. The Select
Committee on Ethics in the 95th Congress emphasized in an advisory
opinion that Members and employees should be "alerted to the need
to exercise care ... in accepting gifts from all sources." 7
In addition to the general ethical problems raised by gift giving as
discussed above, specific rules and restrictions on the receipt of gifts
and entertainment by Members and employees of the House are in
force.
Gifts From Lobbyists, Persons With Direct Interest in Legislation,
and Foreign Nationals. Taking into consideration the ethical problems
arising from the receipt of gifts by Members and employees, the
House of Representatives has promulgated rules establishing clear
limitations on certain gifts. The House Rules at Rule XLIII(4),
presently prohibit Members and employees from receiving gifts
aggregating $100 or more a year from lobbyists or others with direct
interest in legislation before Congress, or from a foreign national or
agent of a foreign national. Gifts of $35 or less, or gifts of personal
hospitality of an individual are not included in the $100 aggregate,
and gifts from relatives are excluded from the prohibition.
Exemptions stated in Rule. — The report by the Commission on
Administrative Review (popularly known as the Obey Commission)
in recommending changes in the Code of Official Conduct of the House
Rules in the 95th Congress, noted that such exemptions in Rule
XLIII(4) were provided to "identify items which do not cause con-
flicts of interest and/or which impose unreasonably stringent limita-
tions if not excluded." 8 As noted in the debate preceding the enact-
ment of the amendments to the House Rules in the 95th Congress
(H. Res. 287), gifts valued at $35 or less will not be counted toward the
$100 aggregate. 9 One of the predominant reasons for providing the $35
9 See discussion in "Ethics in Government," by Paul H. Douglas, Cambridge, 1952, pp. 48-49.
7 House Select Committee on Ethics, Advisory Opinion No. 10, May 11, 1977, p. 3.
8 House Doc. No. 95-73, 95th Congress, 1st Session, "Financial Ethics", p. 14; see also House Select Com-
mittee on Ethics, 95th Congress, Advisory Opinion No. 9, May 11, 1977, p. 2.
9 Congressional Record, March 2, 1977, H. 1578 (daily ed.).
51
exemption was apparently to relieve a Member of the responsibility
and burden of accounting for his specific "share" of an event, attribut-
able to him, when attending such events as House receptions and
the like. 10
As to the "personal hospitality" exemption, the Report of the
Commission on Administrative Review stated :
In this regard, it should be noted once again that the
Commission understands personal hospitality to mean
hospitality extended for a non-business purpose by an
individual, not a corporation or organization, on property
or facilities owned by that individual or his family."
During the debate on H. Res. 287, 95th Congress, it was expressed that
the personal hospitality exemption applied to things such as dinner
(exceeding $35) in an individual's own home, but not if the individual
took the Member or employee to dinner at a restaurant. 12 (If a dinner
were valued at $35 or less, even if the Member or employee were taken
to a restaurant, such gift would be exempt from the Rule under the
$35 exclusion.) Further, it was intended that the "personal hospitality"
exemption would not apply if the individual providing the personal
hospitality were being reimbursed by a corporation or an organiza-
tion. 13 Questions arose during the debate as to how a Member would
know whether an individual were being reimbursed or receiving com-
pensation for such hospitality from a corporation or an interest group.
The reply was made that a Member must "exercise due care" in
receiving gifts of personal hospitality from those who have, or who
represent those who have, an interest in legislation before Congress. 14
Persons with direct interest in legislation. — The prohibition on gifts
in Rule XLIII(4) goes to those gifts "from any person (other than a
relative) having a direct interest in legislation before the Congress or
who is a foreign national." The Rule notes that such "interested"
persons include registered lobbyists, officers or directors of registered
lobby groups, and employees of registered lobby groups who attempt
to influence legislation before Congress. Both the debate preceding the
enactment of H. Res. 287, and the report by the Commission on
Administrative Review, made clear that the inclusion of "lobbyists"
and officers and directors of lobby organizations within the Rule as
those deemed to have a "direct interest" in legislation, was not
intended to be an all-inclusive, limiting definition of that term. 15
Thus, pursuant to its authority under H. Res. 383, 95th Congress,
to issue advisory opinions on the amended Code of Official Conduct,
the Select Committee on Ethics in an advisory opinion found that
any person, group or organization which hires a lobbyist would be an
"interested" person; and that any corporation, labor organization, or
other group which maintains a separate segregated fund for political
purposes, known as a political action committee, and the affiliates,
10 Congressional Record, supra at H. 1577, remarks by Congressman Obey; see also Advisory Opinion
No. 9, supra at p. 2.
" House Doc. No. 95-73, supra at p. 14.
12 Congressional Record, supra at H. 1578.
>»Id.
14 Id., remarks by Representative Brown and Hamilton.
15 Congressional Record, supra at 1615.
52
and officers or directors of such organizations, would be considered
to be persons with a direct interest in legislation before the Congress. 16
As a general rule concerning "interested" persons, the Select Ethics
Committee was of the opinion that to conform to this House Rule,
Members of the House should not accept gifts aggregating over $100
from "any individual or organization which the Member or employee
knows has a distinct or special interest in influencing or affecting the
federal legislative process which sets such individual or organization
apart, from the general public." 17 Thus, for example, the Select Com-
mittee in an earlier advisory opinion found that airline carriers, since
they are regulated by the Federal Government, are considered to have
a direct interest in legislation before the Congress. 18 In summing up,
the Select Committee emphasized the need for Members and employees
to exercise care in accepting gifts from all sources. 19
However, in its final report, the Select Committee also stated that if
the Member does not believe that the donor of the gift has a direct
interest in legislation, as so defined, then he should feel free to accept
such gifts. The Select Committee emphasized that "the gifts limita-
tion is not intended to interrupt or interfere with normal social
relationships," and noted that gifts over $100 would be subject to
disclosure requirements. 20
Items not included as gifts. — Since the limitation in House Rule
XLIII(4) is upon "gifts", this restriction would apparently not apply
to compensation received for "services rendered." The Select Commit-
tee in another advisory opinion found, for example, that as for trans-
portation, food, and lodging expenses for a Member or employee and
the Member's or employee's spouse in connection with a conference or
similar event, such expenses would not be considered "gifts" if the
Member or employee substantially participated in the conference and
performed services to the extent that such services constituted "equal
consideration" for the expense received. 21 Additionally, the Select
Committee, in its final report, noted that the payment of travel ex-
penses and waiver of an entrance fee for a Member of the House to
participate in celebrity or Pro-Am golf tournaments would not be
considered a gift to the Member "since the Member is, in effect, render-
ing a service on behalf of the foundation sponsoring the tournament." 22
It should be noted that in a later opinion the Select Committee found
that necessary expenses (not entertainment) for a "fact-finding" tour,
even when no services were rendered by an employee or Member, might
not be a prohibited gift when the narrowly defined "fact-finding event"
is "directly related to official duties", and is not for the personal plea-
sure or entertainment of the employee or Member, but rather to allow
them "to become better informed regarding subject matters closely
related to their official duties" * The Select Committee noted in this
opinion that a "fact-finding" event for educational purposes might in-
18 House Select Committee on Ethics, Advisory Opinion No. 10, May 11, 1977.
"Id.
18 House Select Committee on Ethics, Advisory Opinion No. 3, April 6, 1977.
" Advisory Opinion No. 10, supra.
20 House Report No. 95-1837, 95th Congress, 2nd Session, Final Report of the Select Committee on Ethics,
P. 11.
21 House Select Committee on Ethics, Advisory Opinion No. 2, April 6, 1977.
22 House Report 95-1837, 95th Congress, 2d Session, Final Report of the Select Committee on Ethics, p. 9.
23 House Select Committee on Ethics, Advisory Opinion No. 8, May 11, 1977. 23. Id. at p. 1.
53
elude such items as an oil company sponsoring "an inspection tour of its
off shore oil drilling platform," a lumber compan}^ arranging "a demon-
stration of new logging methods in a remote area", or a foreign founda-
tion inviting Members to attend a program "designed to promote better
understanding and improve U.S. relations with that country." 2i The
Select Committee emphasized, however, that the term "fact-finding"
event is intended to be interpreted narrowly in the "spirit" of the
House Rules and thus would not cover such things as "free transporta-
tion on a corporate jet or commercial flight from Washington to [a
Member's] district, on grounds that he would 'tour' the corporate
facilities there" (since Members are provided official travel allowances
to their own districts) ; "travel expenses provided by representatives
of the maritime industry to attend a ship-launching"; 25 or inaugural
flights of airlines. 26 The Select Committee also noted that the expenses
of a Member's or employee's spouse in an overseas "fact-finding"
event may properly be accepted under this opinion since it may be
desirable for a spouse to attend such a function for protocol and
diplomatic reasons. However, the acceptance of expenses of a Mem-
ber's or employee's spouse for a domestic "fact-finding" tour would
probably not be permissible under the exclusions allowed in the Select
Committee's advisory opinion. 27
The House Select Committee defined generally the term "gift" for
purposes of the House Rule, and provided general exceptions as to
what items would not be considered gifts for purposes of the pro-
hibition in Rule XLIII (4). The summary of the Committee's opinion,
as amended in its final report follows :
For purposes of Rule XLIII, clause 4, a gift is defined as follows:
A payment, subscription, advance, forbearance, render-
ing, or deposit of money, services, or anything of value, in-
cluding food, lodging, transportation, or entertainment, and
reimbursement for other than necessary expenses, unless con-
sideration of equal or greater value is received by the donor.
The Select Committee found, based on the language of new Rule
XLIII, clause 4, the Rule's legislative history, the absence of conflict
of interest issues, and/or public policy considerations, that the follow-
ing items are not gifts for purposes of Rule XLIII, clause 4 :
(1) Bequests and other forms of inheritance;
(2) Loans made in a commercially reasonable manner (includ-
ing requirements that the loan be repaid and that a reasonable
rate of interest be paid) ;
(3) Political contributions as defined by the Federal Election
Commission and otherwise reported as required by law ;
(4) Food, lodging, transportation, and entertainment provided
on an official basis by federal, state, and local governments or
political subdivisions thereof;
(5) Food, lodging, transportation, and entertainment provided
by a foreign government within a foreign country;
2 « Id. at p. 1.
"Id. at p. 3.
M House Select Committee on Ethics, Advisory Opinion No. 3, April 6, 1977.
27 Advisory Opinion No. 8, supra at p. 2.
54
(6) Communications to a Member's offices in Washington and
his district, including subscriptions to newspapers, magazines,
and other periodicals;
(7) Bona fide awards presented in recognition of public service
and available to the general public;
(8) Suitable mementos of a function honoring the Member,
officer, or employee ;
(9) Consumable products provided by home-state businesses
to a Member's office that are primarily intended for consumption
by persons other than the Member and his staff;
(10) Food and beverages consumed at banquets, receptions or
similar events. 28
Valuation of certain gifts. — The House Select Committee on Ethics
of the 95th Congress noted in its final report certain guidelines for the
valuation of some gifts which might be offered to Members and staff.
The Committee noted that the gift of a ticket to a political fund-
raising dinner (such as a $500-per plate fundraiser), should be valued
at the cost of the dinner rather than the cost of the ticket to the pur-
chaser. The Committee also found that the value of a courtesy pass
to an amusement park would be determined by the number of times
the pass was actually used. Similarly, the Committee noted that an
honorary membership to a country club is valued according to the
actual use. Thus, if the membership were never used, it would have
no value. However, if the Member or employee and their family
regularly enjoyed the benefits of the country club, the membership
gift would be valued at the rate of normal dues to that club On the
other hand, however, a gift of a season ticket to an athletic event or
the theatre is valued at the cost of the tickets, regardless if actually
used, "since it is readily transferable." 29
Gifts to spouse or dependents. — House Rule XLIII(4) prohibits
Members from receiving gifts from "interested" persons or foreign
nationals either "directly or indirectly." The Select Committee on
Ethics noted that although the term "indirectly" may apply to gifts
from agents of those persons who would be prohibited from giving
directly to employees and Members, such term refers mainly to
gifts to the spouse or dependents of a Member or an employee.
The Select Committee noted that, generally, gifts to a spouse or
dependent of a Member or employee would be considered an
"indirect" gift to that Member or employee. However, when
circumstances make it clear that a gift is truly independent of
a spouse's or dependent's relationship to the Member or employee,
then such a gift will not be considered a gift to the Member or
employee under House Rule XLIII(4). 30 The Committee also found
in this opinion that simultaneous gifts such as dinner or reception
invitations to a Member and his spouse and dependents should be
treated as separate gifts, and need not be aggregated for purposes of
the $35 exclusion or the $100 maximum within Rule XLIII(4). Thus,
for example, dinner invitations valued at approximately $20 each
extended to a Member and his spouse, would be considered two $20
gifts (thus falling under the $35 exemption), rather than one $40 gift.
Gifts From Foreign Governments. Members and employees of
Congress are prohibited by the provisions of the United States
Constitution (at Article I, Sec. 9, clause, 8), from receiving a gift or
28 House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 7, May 9, 1977.
29 House Report 95-1837, supra at p. 9.
30 House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 9, May 11, 1977.
55
"present * * * of any kind whatever" from a foreign state or a repre-
sentative of a foreign government without the consent of the Congress.
Congress has consented, in the form of the Foreign Gifts and Decora-
tions Act, 31 to the acceptance of gifts from foreign governments of
minimal value 32 ($100 or less) when tendered as a souvenir or mark
of courtesy, and other gifts from foreign governments under special
circumstances.
In addition to gifts of minimal value, the Foreign Gifts and Decora-
tions Act allows the acceptance (but not the retention) of a gift of more
than minimal value when refusal of the gift would cause offense or
embarrassment or otherwise adversely affect United States foreign
relations. 33 Such gifts, however, within 60 days after acceptance, must
be turned over to the United States for use or disposal. 34 Additionally,
a Member or employee may accept gifts from foreign governments in
the form of educational scholarship or medical treatment ; 35 in connec-
tion with an approved cultural exchange program; 36 and may accept
payments for foreign travel expenses outside of the United States
when in the interest of the United States and approved by the House
Committee on Standards of Official Conduct. 37
The Committee on Standards of Official Conduct has issued regu-
lations concerning the prohibited and permissible receipt of gifts from
foreign governments by Members, officers, and employees of the
House. 38 Concerning travel or expenses for travel outside of the United
States, the Committee has approved the acceptance of such travel or
expenses when it relates "directly to the official duties of the Member,
officer, or employee." 39 The regulations allow the acceptance of the
gift of travel or expenses by the spouse or dependent of the Member
or employee (which would otherwise have been prohibited under the
provisions of the Foreign Gifts and Decorations Act) when accom-
panying such Member or employee on a trip. The committee regula-
tions specifically note, however, that travel or expenses for travel
"may not be accepted merely for the personal benefit, pleasure,
enjoyment or financial enrichment of the individual or individuals
involved." Any gift of travel or travel expenses accepted by a Member
or employee must be disclosed in a disclosure statement within 30 days
after acceptance, and tangible gifts of more than minimal value must
be disclosed at the time of deposit of such gift with the Government.
Fundraisers and Testimonials. The Rules of the House, at Rule
XLIII(7), now provide that any proceeds from testimonial dinners or
other fund raising events for a Member are to be treated as campaign
contributions, subject to all the restrictions on campaign funds. Thus,
any proceeds from testimonials or other fund raisers may only be used
by the Member for bona fide campaign purposes, 40 and may not be
treated as unrestricted personal gifts to the Member. Specifically,
si 5 U.S.C. § 7342, as amended by P.L. 95-105.
"5 U.S.C. 5 7342(c)(1)(A), and (a)(5).
33 5 U.S.C. § 7342(c)(1)(B).
M 5 U.S.C. §7342(c)(2).
«5 U.S.C. § 7342(c)(1)(B).
38 22 U.S.C § 2458a.
37 5 U.S.C. § 7342(c) (l)(B)(ii).
38 See regulations published in Congressional Record, January 23, 1978, H 112 (daily ed.).
38 House Committee on Standards of Official Conduct, Regulations for the Acceptance of Decorations
and Gifts, Including Travel or Expenses for Travel, by Members, Officers, or Employees of the House of
Representatives from P'oreign Governments, Section 6(e).
<o House Rule XLIII(6).
56
campaign funds under the Rules of the House may not be converted
to personal use, 41 nor be used for official congressional purposes. 42
The restriction of Rule XLIII(7) in its present form derived from
H. Res. 287, 95th Congress, 1st Session, revising the former House
Rule which had allowed Members to use such proceeds for other
than campaign purposes if advance notice had been given to the
participants of the fund raiser. In recommending the change to the
more stringent Rule, the Commission on Administrative Review of
the 95th Congress stated simply: "Proceeds from testimonial dinners
should not be converted to funds for personal use under any cir-
cumstances." 43
In an Advisory Opinion, the House Select Committee on Ethics
found that a direct mail solicitation by a Member of the House or
the spouse of a Member constitutes a "fund-raising event" for pur-
poses of House Rule XLIII(7), and thus proceeds from such a solicita-
tion must be treated as campaign contributions which may not be
converted to personal use by the Member. Finding such, the Select
Committee noted that a major purpose of the revisions of the Code
of Official Conduct was to prevent Members from "cashing in" on
their official position in the Congress :
But in view of the widespread use of mass mailings to
raise funds (direct mail solicitation has become a principal
fund raising technique since 1968), it would appear that the
proposal under consideration constitutes a fund-raising event.
In the age of computerized mass mailings, it is unnecessary
for people to gather together in a common place on a partic-
ular date to constitute a "fund-raising event."
A major thrust of the provisions contained in the new
House Rules adopted March 2, 1977, was to severely limit
the potential for Members to "cash in" on their positions of
influence for personal gain. Therefore, a limitation on outside
earned income was proposed and adopted. A proposal to
abolish unofficial office accounts was offered and adopted. A
proposal to prohibit the conversion of political funds to
personal use was adopted. And the proposal discussed
above to treat all proceeds from fundraising events as cam-
paign contributions was also adopted. Therefore, it would
appear that a proposal to solicit funds for personal use
would be contrary to the "spirit" of the House Rules
adopted pursuant to H. Res. 287 [see: H. Rule XLIII(2)]. 44
The House Select Committee on Ethics also found, in Advisory
Opinion No. 11, May 11, 1977, that a Member may not accept
proceeds for his unrestricted personal use from a fundraiser which
is conducted by a group which is independent from the Member. The
Committee stated :
A major thrust of the provisions contained in the new
House Rules was to severely limit the potential for Members
of Congress to use their positions of influence for personal
<i House Rule XLIIIffO
« House Rules XLV, XLVI(4).
43 House Doc. No. 95-73, supra at p. 14.
tl Advisory Opinion No. 4, April 6, 1977.
57
fain. In this context, therefore, it is irrelevant whether the
lember himself solicits these funds, or whether the Member
accepts funds for personal use that are solicited on his behalf
by an independent committee.
Certain exceptions to this rule were, however, noted by the Select
Committee on Ethics in its final report. The Committee found that
a fundraiser may be held to help a Member pay for the medical
expenses resulting from a catastrophic illness of a family member
when the Member does not participate in the fundraising or disburse-
ment of the funds and where the proceeds of the fundraiser are applied
directly to pay for medical costs and are not used for other purposes.
Additionally, the Select Committee was of the opinion that a Member
could use the proceeds of a fundraiser for a legal defense fund for
the Member to pay legal expenses incurred in "defending a court
action arising out of either a contested election or performance of
official duties." a
Appearances of Influence. In addition to specific prohibitions on
amounts and sources of gifts, a general ethical standard recognized by
the House notes that Members and employees should not accept
favors or benefits for themselves or their families "under circumstances
which might be construed by reasonable persons as influencing the
performance of [their] governmental duties." 46 This rule would
apparently take into consideration the nature of the gift or benefit as
to possible conflicts of interest with the official duties of the employee
or Member, as well as the source and amount of the gift as to possible
influences upon the employee or Member and favoritism towards the
donor. This standard of conduct would thus encompass the general
ethical principles discussed above concerning the receipt of gifts in
general and would require caution and discretion by a Member and an
employee of the House in accepting any gift, favor, or benefit which
would not have been offered "but for" the individual's position in
Congress.
Bribery. When gifts, money, or other things of value are received
by a public official, such as a Member or an employee of the House, in
return for being influenced in the performance of official duties, or for
or because of any official act done by him, then a violation of the
Federal bribery statute may be present. There are two applicable
clauses within the bribery statute which specifically prohibit Federal
officials from "corruptly" receiving or asking for "anything of value
for himself or for any other person or entity, in return for being
influenced in his performance of any official act", at 18 U.S.C. § 201 (c) ;
and from receiving "otherwise as provided by law" anything of value
"for or because of any official act performed or to be performed by
him" at 18 U.S.C. § 201(g). The distinguishing features of the
"bribery" section (§ 201(c)), and the "illegal gratuity" section of
§ 201(g) were discussed by the United States Court of Appeals for
the District of Columbia:
The bribery section makes necessary an explicit quid pro
quo which need not exist if only an illegal gratuity is in-
volved; the briber is the mover or producer of the official
« House Kept. 95-1837, supra at pp. 14-15.
»72 Stat., part 2, p. B. 12, paragraph 5; note H. Rpt. No. 94-1364, 94th Congress, 2d Session.
293-587 O - 79
58
act, but the official act for which the gratuity is given might
have been done without the gratuity, although the gratuity
was produced because of the official act. 47
The two applicable clauses within the bribery statute both require
as an element of the offense that the thing of value received or solicited
by the official be related in some manner to an official act done or to
be done by the officer or employee, that is, either "in return for being
influenced in", or "for or because of", an official act. This element of
the two offenses, that the thing of value received relate to some
official act, distinguishes the "bribe" of subsection (c) or the "illegal
gratuity" of subsection (g) from a mere "gift" which, as generally
defined, is a "voluntary transfer of personal property * * * made
gratuitously, and not upon any consideration * * *." 48 The receipt
of a gift by a Member, therefore, as opposed to a bribe or an illegal
gratuity, would not be shown to have been received with the requisite
connection or relation to any official act done or to be done by the
Member. 49
Somewhat akin to the bribery statute at 18 U.S.C. § 201 is a pro-
hibition at 18 U.S.C. § 203 which works to prohibit House Members
and employees from receiving anything of value as compensation for
"services rendered" anyone before a Federal agency, department, or
bureau. Thus, even if the acts before the Government agency were
proper or within the official capacity of the Member or employee, the
offense would arise in the receipt of compensation, other than one's
congressional salary, for such acts. 50 A statutory provision at 18
U.S.C. §211 specifically prohibits the receipt of things of value for
supporting someone for, or using one's influence in obtaining someone
a Federal job. Thus, caution should be exercised in the receipt of
gifts, favors, contributions or entertainment from persons whom the
Member or his staff has assisted with job applications or other deal-
ings with the agencies of the Federal Government.
Financial Disclosure. Under legislation entitled the "Ethics in
Government Act of 1978", P.L. 95-521, Members of the House,
employees of the House earning a salary of a GS-16 or more, and
at least one principal assistant to a Member if no one on the Member's
staff has a salary of a GS-16 or more, must disclose in annual financial
statements the source and amount of gifts aggregating over $100 from
a single source; and gifts of transportation, lodging, food or entertain-
ment aggregating $250 or more from a single source. 51 Additional
information on certain gifts received by the spouse or dependent of the
Member or covered employee may also need to be filed." Additionally,
as noted above, tangible gifts of over minimal value which may be
received from foreign governments must be disclosed at the time such
gifts are required to be turned over to the United States, that is,
within 60 days after receipt ; and gifts of travel or expenses for travel,
from foreign governments must be disclosed and reported within 30
days of receipt. 53
« United State* v. Brewster, 506 F.2d 62, 72 (1974).
« Black's Law Dictionary, 4th Ed., p. 817. »' . j. '••
«• United State* v. Brewster, supra.
» May v. United States, 175 F.2d 994 (1949);
« Public Law 95-521, Sec. 102(a)(2), 2 U.S.C. { 702(a)(2).
« Public Law 95-521, Sec. 102(d)(1)(B) and (c), 2 U.S.C. 5 702(d)(1).
M House Committee on Standards of Official Conduct Regulations pertaining to receipt of foreign gifts,.
supra.
Chapter 7. OUTSIDE EMPLOYMENT AND COMPENSATION
OF MEMBERS
Highlight
Generally, regulations, rules and opinions concerning outside com-
pensation or employment of Members are concerned with potential
conflicts of interest; potential influences on the Member's official
conduct; the possible distraction from the time and attention which
a Member is expected to devote to his official congressional responsi-
bilities; and the possible appearance that a Member is "cashing in"
on his position in the Congress.
Specifically, as to outside employment and compensation, a Mem-
ber of the House may not:
— earn more than $8,625 in outside earned income in a calendar
year, under present limits on outside earned income of 15%
of a Member's annual congressional salary;
— accept an honorarium of more than $1,000 for one appearance,
speech or article, or more than a total of $8,625 in honorariums
or other earned income in one year; and may not accept hono-
rariums in excess of the customary amount for a particular
appearance, article, or speech;
— use one's official position in Congress as a means for making
personal gains;
— receive compensation for services rendered by himself or by
anyone else before Federal agencies or departments;
— contract directly or indirectly with the Federal Government;
— participate in "self-dealings" with a private foundation with-
out incurring specific tax penalties;
— receive "emoluments", or compensation, of any kind from a
foreign government.
House Rules, ethical standards, and statutory provisions work to
greatly restrict the private practice of law by Members of the House,
particularly the continued affiliation with a law firm, although the
practice of law by House Members and a Member's affiliation with a
firm are not strictly prohibited.
Members of the House are required to file annual financial disclosure
statements detailing specific information on certain income received,
in addition to other financial information required to be disclosed.
(5«J)
Chapter 7. OUTSIDE EMPLOYMENT AND COMPENSATION
OF MEMBERS
The discussion of the regulations governing outside employment and
compensation of Members of the House relates generally to personal
services by the Member and the receipt of what is commonly referred
to as "earned" income, that is, compensation received for personal
services and employment, as opposed to income from investments or
other financial assets.
Members of the House of Representatives are under numerous
restrictions concerning their permissible outside employment and the
receipt of outside earned income. These restrictions are generally
addressed to various problems which may arise because of a Member's
private employment, that is, a possibility of a conflict between the
narrow interests of a private employer and the broader interests of
the general public; possible influences upon the judgment of a Member
in performing his official duties because of employment with and the
receipt of compensation from a private source; a possible distraction
from the time and attention to which the Member, as a full-time
legislator, is expected to devote to his congressional duties; and the
appearance of impropriety which might occur in the eyes of the public
to the effect that the Member is "cashing-in" on his position of in-
fluence in receiving additional income and compensation from private
sources.
A general ethical principle in the House of Representatives is that a
Member should not use the prestige and influence of his position in
Congress for his own personal gain. In attempting to realize this
principle, and to deal with the problems which may arise in relation
to conflicts of interest and "time" conflicts, the House of Representa-
tives has adopted various standards of conduct in addition to the statu-
tory restraints on outside employment and income. Most significantly,
the Rules of the House limit the total amount of outside earned in-
come which a Member may receive in a year. Under the present salary
structure in the House, a Member may not receive more than a total
of $8,625 in earned income from all outside employment in any
calendar year. 1
The House Commission on Administrative Review of the 95th
Congress, which recommended the changes in the House Rules adopt-
ing the overall earned income limitation, noted basic reasons for focus-
ing on and restricting earned income from outside employment activi-
ties of a Member, rather than income from assets or investments:
Earned income creates a variety of more serious potential
conflicts of interest than does investment income, ranging
from overt attempts to curry favor by private groups to
subtle distortions in the judgment of Members on particular
1 Rules of the House of Representatives, Rule XLVTI.
(60)
61
issues. * * * The Member who has stock holdings can trans-
fer his holdings at any time to another company, and thus,
is not subject to the same degrees of potential conflict as a
Member whose * * * salary [from a private company] could
be cut off arbitrarily.
Outside earned income also presents a "time conflict"
between the Member's private interest and the public in-
terest. Supplementing salary with outside earned income
can detract from a Member's full-time attention to his
official duties and creates subtle distortions in judgment as
how Members should use their time. * * *
Moreover, many citizens perceive outside earned income
as providing Members with an opportunity to "cash in" on
their positions of influence. Even if there is no actual impro-
priety, such sources of income give the Appearance of impro-
priety and, in so doing, further undermine public confidence
and trust in government officials. 2
In addition to the limit on overall earned income and the rules
barring the use of one's official position for personal gain, Members
of the House are restricted in particular areas of outside employment
and compensation. For example, Members of Congress are prohibited
from receiving compensation for services rendered before Federal
agencies; are prohibited from contracting with the Federal Govern-
ment; are restricted in their "self -dealings" with private foundations;;
are prohibited from receiving any compensation from foreign govern-
ments; are limited in the amount of honorariums they may accept^
are restricted in some areas of the practice of law; and are required to
make annual financial disclosure statements with respect to income
and compensation received, among other items of financial information.
Outside Employment and Official Activities. There is no statutory
provision or Rule of the House which states a specific prohibition
against a Member of the House engaging in outside private employ-
ment which "conflicts" with or is "inconsistent" with the Member's
official duties. Conflicting or inconsistent private employment might
occur when, for example, the interests of a private employer or client
are at odds with the interests of the general public on a particular
matter, or where specific matters involved in private outside employ-
ment would be before the Member in an official congressional capacity,'
It may be noted that conflicting or inconsistent outside employment
for compensation by Members of the Senate is specifically prohibited
by the Standing Rules of the Senate. 3
Although no rule in the House specifically prohibits Members,
from engaging in conflicting outside employment, ethical standards and
rules restrict Members in certain aspects of outside employment, that
is, in the relationship between the Member's receipt of outside com-
pensation, benefits or employment and the Member's performance of
official congressional duties and responsibilities. The "Code of Ethics
for Government Service", 4 in addition to stating generally that a
* House Document No. 95-73, 95th Congress, 1st Session, "Financial Ethics", Communication from the
Chairman, Commission on Administrative Review, U.S. House of Representatives, p. 10.
» Standing Rules of the Senate, Rule XLVC2).
* 72 Stat., part 2, B12 (195S), H. Con. Res. 175, 85th Congress; see House Rpt. No. 94-1364 as to continuing
applicability of ethical standards.
62
"public office is a public trust", 5 specifically provides that a Member
should never accept "benefits under circumstances which might be
construed by reasonable persons as influencing the performance of his
governmental duties." 6 The provisions of the Code of Ethics would
therefore look to the relationship between the receipt of compensation
or other benefits from a private source and the official functions of a
Member of the House as to appearances of possible improprieties,
undue influences, or breaches of the public trust.
Thus, for example, if a Member seeks benefits from an organization
or firm when the Member, in his official congressional capacity, had
actively promoted the establishment of that organization, then a
possible violation of this provision barring appearances of influence
might occur. 7 Additionally, if the Member sponsors legislation which
specifically deals with and affects a specific organization or interest
from which the Member is receiving compensation or other benefits,
then there may exist a possible violation of the ethical principles
embodied in the Code of Ethics for Government Service which, as
discussed by the House Committee on Standards of Official Conduct,
work to "prohibit conflicts of interest and the use of official position
for any personal benefit". 8
Members of the House are further instructed by the House Rules,
at Rule XLIII(3), not to receive any compensation or allow any
compensation to accrue to one's beneficial interest from any source,
the receipt of which would occur by virtue of influence improperly
exerted from the Member's position in the Congress. This provision
would again necessitate an examination into the circumstances sur-
rounding the receipt of outside compensation and the relationship of
that receipt to official acts or influences exerted by the Member to
determine, as noted in the debate preceding the adoption of this rule
.in 1968, if a Member has "used his political influence, the influence
of his position as a Member, to make pecuniary gains". 9 Finally,
.along similar lines, Members of the House are prohibited from using
-confidential information received in the performance of their official
s/duties as a means for making private profit. 10
Earned Income Limitation. The House of Representatives adopted
House Rule XLVII on March 2, 1977 (H. Res. 287, 95th Congress,
1st Session), which places restrictions upon the outside earned in-
come of Members of the House. This provision, effective January 1,-
1979, specifically limits the amount of aggregate outside earned in-
come (including honorariums) which a Member may receive in a
calendar year to 15% of the Member's yearly congressional salary.
At present congressional salaries, this would put a cap of $8,625 on
the total outside earned income which a Member may receive in a
year.
The limitation in this rule applies to income earned for personal
services, rather than moneys received from ownerships or other invest-
8 Id. at para. 10.
• Id. at para. 5.
7 See; House Report No. 94-1364, 94th Congress, 2d Session, "Tn the Matter of a Complaint Against Repre-
sentative Robert L. F. Sikes", Report by the Committee on Standards of Official Conduct, pp. 3-4.
8 Id. at p. 4
• Congressional Record, April 3, 1968, p. 8807, comments by Representative Price.
19 Code of Ethics for Government Service, supra at para. 8; see 7 U.S.C. § 13(e) as to use of inside informa-
tion from the Commodity Futures Trading Commission; and 50 App. U.S.C. § 2160(f), (extended to Sep-
tember 30, 1979, 50 App. U.S.C. § 2166, Public Law 95-37) as to the use of any confidential information
received by virtue of public position in speculating in any commodity exchange.
63
ments or equity. As discussed in the floor debate on this rule, "[t]he
determination is whether one earned it by the sweat of his brow, in
which case it would be earned income, or because of ownership" in a
firm or business which would not be within the limitation. 11 In an
advisory opinion of the House Select Committee on Ethics in the 95th
Congress, the Committee emphasized that the facts of a particular
case would control as to whether moneys received were earned income,
rather than any characterization of such moneys. That is, money
received for personal services, earned income, "by any other name",
would still be earned income for purposes of the rule. As stated by the
Committee :
[T]he label or characterization placed on a transaction,
arrangement or payment by the parties may be disregarded
for purposes of the Rule. Thus, if the amounts received or
to be received by a Member are in fact attributable to any
significant extent to services rendered by the Member, the
characterization of such amounts as partnership distributive
share, dividends, rent, interest, payment for a capital asset,
or the like, will not serve to prevent the application of Rule
XLVII to such amounts. 12
In personal service businesses where capital is not a material income
producing factor, such as in the practice of one's profession as a doctor,
lawyer, insurance broker, or real estate agent, the House Select Com-
mittee on Ethics has noted that the entire share of the profits for the
Member will generally be considered earned income, unless it can be
shown that some income actually derives from a return on an invest-
ment. 13 Even where the Member performs no personal services, it
will be presumed, absent a strong showing to the contrary, that his
share of the profits from a service business is for attracting or retaining
clients, and thus earned income. 14 As to law practices specifically, the
Committee noted that "buy-out" arrangements are permitted and
will not be counted toward the earned income limit when fair and
reasonable in relation to comparable practices. 15 If a Member does
retain an interest in a law firm, the Member "may treat as unearned
income a portion of his share of the profits from the law firm, as from
any other personal service business, equal to interest computed at
10 percent per annum on his investment in the business assets". 16
In business corporations, only consideration to the Member for
services performed will be considered earned income, and an increase
in the value of the firm's stock or profits distributed will not be con-
sidered earned income for the Rule. 17 This, however, cannot be used
as a subterfuge to have compensation for a Member's personal services
directed to a corporation and then distributed to the Member as
"profits", such as where a Member would incorporate for purposes of
making speeches or writing articles and have all fees directed to the
corporation which then in turn distributes "profits" and "dividends"
to the Member. 18
11 Congressional Record, March 2, 1977, H 1582 (daily ed.). comments by Mr. Frenzel.
12 House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 13. See: Final Report of
House Select Committee on Ethics, H. Rept. No. 95-1837, p. 82.
"Id.
« Id. at p. 83.
"Id.
'• Id. at p. 84.
"Id.
aid.
64
As for closed corporations, partnerships and unincorporated businesses,
where a Member has an ownership interest and also performs some
services, some of the profit realized from the business might result
from the personal services of the Member and therefore would be
considered earned income. As noted by the Select Committee, "the
determining factor is whether the Member's personal services generate
significant income for the business." 19 The Member may protect his
interest and investments in the business through general oversight
and management of his investments without generating earned income.
However, fees, compensation, or salaries from such a business are
earned income, and where the Member's principal function is to refer
clients or help retain clients, then "the Member would be deemed to
be rendering income-producing services, even though the actual time
involved might be minimal." 2 °
The rules on income-producing services for a business in which the
Member has an ownership interest would also apply generally to a
family business or farm. 21 As provided in Rule XLVII, the term
"outside earned income" means "wages, salaries, professional fees,
honorariums, and other amounts (other than copyright rc^alties)
received or to be received as compensation for personal services
actually rendered", but, however, does not include (1) the Member's
congressional salary; (2) compensation from services rendered prior
to becoming a Member or before the effective date of this rule; (3)
amounts received from a qualified pension, profit-sharing, or stock
bonus plan; and (4) in the case of a family controlled business or farm,
amounts received in connection with protecting or managing one's
investment as long as the personal services rendered by a Member
do not in themselves generate a significant amount of income.
The Commission on Administrative Review in the 95th Congress
offered an explanation concerning the family business or farm exemp-
tion from the personal earned income limitation:
In interpreting what constitutes earned income for per-
sonal services, the Commission believes that Members
should be able to render pergonal services to manage or pro-
tect their equity in a family trade or business without having
to allocate these personal services toward the 15-percent
limitation. However, if the personal services, in and of them-
selves, generate any significant amount of income, the result-
ing income should be subject to the 15-percent limitation.
Conversely, the Commission believes that in implementing
this limitation care should be taken to prevent Members from
circumventing it by incorporating themselves into a "family
business" and then withdrawing what in reality are fees for
personal services in the form of dividends or profits. 22
Similarly, as discussed in the debate preceding the adoption of this
Rule, personal services which generate income will not come within
this exemption and would thus be subject to the 15 percent limit:
The crucial element in determining whether the limitation
applies, the 15-percent limitation, is this: If the personal serv-
ices produce the income, then it does not matter whether it is
n Id. at p. 85.
»«Id.
»'Id.
a House Document No. 95-73, supra at p. 11*
65
a family business or whether it is not a family business or
whether it is a law firm, or anything else. It those personal
services actually produce the income, then it comes under the
limitation.
On the other hand, if the Member is merely acting to pro-
tect his investment, to protect his equity, to protect his capi-
tal, then it is not services rendered to produce income; and
that income is not subject to the limitation. 23
Additionally, the Select Committee stated the following with re-
spect to the "family business" exemption in the rule:
The definition of earned income in Rule XLVII, which ex-
cludes amounts received by a Member from a family con-
trolled business "so long as the personal services actually
rendered by the Member ... do not generate a significant
amount of income," 24 was simply intended to assure Members
that they could continue to make decisions and take actions
necessary to manage or protect their equity in a family trade
or business, and would not be forced to divest themselves of
their f amily business interests. As with any business, a Mem-
ber would not be required to allocate his share of the profits
of the business as outside earned income when the facts and
circumstances show that the income is in reality a return on
investment. 25
Income generally comes within the limitation for that year and that
time when the Member earns it, that is, "when the Member's right to
receive it becomes certain". 26 A Member may therefore not earn in*
come and have it deferred to another year or when he leaves Congress
to avoid the income limitation. As for honorariums, however, the
Select Committee was of the opinion that the Member would have the
limited option (for example, at the end of the year) of treating hon-
orariums received on the "accrual" basis as discussed above, that is,
when earned, or may treat such honorariums on a "cash" basis, that
is, applicable to the year when received. 27
Services Before Federal Agencies. Members of Congress are spe-
cifically prohibited by a Federal criminal statute at 18 U.S.C. § 203
from receiving compensation, directly or indirectly, for any "services
rendered" in relation to any matter or proceeding in which the United
States is a party or has an interest, before any Government agency,
department or bureau. Thus, as discussed in the chapter dealing with
communications to Federal agencies on behalf of constituents, a
Member may not receive compensation or things of value, other than
his congressional salary, for interceding, representing, or for other
dealings with an administrative agency on behalf of a constituent or
on behalf of any other person or organization. The terms of this
statutory prohibition, although applicable to matters before "any
department, agency, courtmartial, officer, or any other civil, military,
or naval commission", do not apply and were not intended to apply to
matters or proceedings before a court of law. 28
M Congressional Record, March 2, 1977, H 1577 (daily ed.), comments by Representative Hamilton; see
also H. 1631 comments by Representative Obey.
M Home Rule XLVII.
>« See H. Rot. No. 95-1837, supra, at p. 85.
a « See: H. Rpt. No. 95-1837, supra at p. 81.
« Id. at p. 87.
a Compare 18 U.S.C. § 203 with 18 U.S.C. § 205; see legislative history of provision, House Report No.
748, 87th Congress, 1st Session (to accompany H.R. 8140), p. 20; also Memorandum of Attorney General
Regarding Conflict of Interest Provisions of Public Law 87-849, Feb. 1, 1963, 28 F.R. 985 (see 18 U.8.O.
i 201, note).
66
In interpreting this provision Federal court cases have found that
even if the acts of a Member in contacting a Federal agency on behalf
of a private individual or organization were within the "scope of his
official duties as a congressman", the gist of the offense is accepting
additional compensation for such services rendered. 29 As to activities
which might not be considered the requisite "services rendered" under
the provision, a Federal District Court has found that mere inquiries
by a Member of Congress concerning the status of a pending matter
before a Federal bureau, without discussion of the merits of a case, did
not constitute prohibited "services rendered" within the statutory
framework. 30 If a Member is found in violation of this statutory pro-
vision for receiving compensation for services rendered to private
individuals or groups before Federal agencies, it should be noted, the
Member may be liable for repayment of compensation unlawfully
received under a theory of breach of fiduciary duty and trust by the
Member. As held by a Federal court in finding a former Member of
Congress liable for such repayment, a violation of section 203 :
unquestionably demonstrates a breach of trust, for in order
to fall within its prohibition, a member of Congress must shed
the duty of disinterested advocacy owed the government and
his constituents in favor of championing private interests
potentially inconsistent with this charge. 31
The prohibition within section 203 extends to the receipt of com-
pensation "directly or indirectly" for services before Federal agencies.
Therefore, if a Member is in a partnership arrangement or otherwise
shares in fees from services rendered before Federal agencies, a viola-
tion of this provision may occur even if the Member did not personally
perform services before the agencies. 32 Although most relevant to
Members who practice law, and therefore discussed in some detail in
the section concerning congressional law practices, it should be noted
here that the Department of Justice has stated in an informal letter
opinion that section 203 "bars a partner in a law firm from sharing
in any fees received by the firm before any Federal department or
agency during the time he is or was a Federal employee." 33 Although
such fee sharing or partnership arrangements concerning Federal
agency practice would be prohibited, section 203 as interpreted by the
Justice Department would apparently allow a Member to receive a
fixed salary from a firm or organization which derives some revenue
from Federal agency practice. The Justice Department letter cited
above noted that "this Office has interpreted § 203 not to apply to a
person who receives a fixed salary as an employee of a firm (as opposed
to someone who shares in the firm's profits), even though some of the
firm's overall income may be attributable to service covered by § 203."
Provisions of Federal law at 5 U.S.C. § 501, also provide that a
firm, business, or organization which practices before the Federal
Government may not use the name of a Member of Congress to
advertise the busmess. As for dealings in general with the Government,
ethical standards adopted in the Code of Ethics for Government Service
state that all officers of the Government, including Members, may not
»• May v. United States, 175 F. 2d 944 (1949).
*» United States v. Quinn, 141 F. Supp. 622 (D.N.Y. 1956).
« United States v. Podell, 436 F. Supp. 1039 (1977), aff'd 572 F. 2d 31 (2d Cir. 1978).
■ See: House Committee on Standards of Official Conduct, Advisory Opinion No. 1, January 26, 1970.
*» Letter of March 14, 1978. from Leon Ulman, Deputy Assistant Attorney General, Office of Legal
Counsel, Department of Justice.
67
engage in any business with the Government, either directly or indi-
rectly, "which is inconsistent with the conscientious performance of
his governmental duties." Finally, as discussed below, a Member of
Congress may not contract with the Federal Government, or receive
benefits arising from a Government contract.
Contracting With the Federal Government. A federal criminal
prohibition, at 18 U.S.C. § 431, provides a penalty for any Member of
Congress who "undertakes, executes, holds or enjoys" a contract or
agreement entered into with the United States. Further, a Federal
statute at 41 U.S.C. § 22, requires that all Government contracts
contain a clause providing that no Member of Congress may share in
the benefits arising from such contract. In addition to the prohibition
on a Member contracting with the Government, 18 U.S.C. § 432
penalizes any officer or employee of the United States who "makes or
enters into any contract, bargain or agreement" with a Member of
Congress on behalf of the United States.
The statute provides that a Member may not "directly or indi-
rectly" hold, execute, undertake, or enjoy "in whole or in part" any
contract with the Government. No specific interpretation of the terms,
"directly or indirectly" was found as to their specific intent concern-
ing the requisite relationship of a Member to the benefits of a Govern-
ment contract for a violation to occur. An opinion of the Attorney
General found, however, that a partnership, of which a Member of
Congress is a member, is prohibited from entering into a contract
with the Federal Government. 34 There are no definitive rulings as to
whether a Member of Congress may receive compensation as an
employee rather than a partner from a firm or organization holding
a Government contract, although some state decisions in this area
have found that such a connection to and benefit arising from a gov-
ernment contract would be prohibited a legislator. 35 Further, although
section 431 is a criminal statute and thus must be interpreted nar-
rowly, a Member of Congress receiving compensation or fees from an
organization's or firm's Government contract either as a salary,
honorarium, or subcontract, might be considered to be benefiting
from that Federal contract in violation of the standards expressed in
41 U.S.C. sec. 22, even if arguably not committing an indictable
criminal offense under 18 U.S.C. §431. The provisions of public
contract law at title 41 are apparently only "directory" in nature. 3 *
However, they arguably establish a standard of conduct to be observed
by Members of the House.
One relationship of a Member of Congress to a Government con-
tract has been specifically exempt from the statutory prohibition,
that is, any contract made, entered into, or accepted by an incorpo-
rated company for the general benefit of the corporation. Thus, under
18 U.S.C. § 433 a Member of Congress may apparently be a stock-
holder, even a principal stockholder, or an officer of a corporation
which holds a Government contract without a violation of the statu-
tory provision at 18 U.S.C. § 431. It would appear that the exception
for contracts with corporations contained in the criminal provision
" 4 Op. Atty Gen. 47 (1842).
'« See: 47 Virginia Law Review 1034, 1050-1051 (1961).
»• United States v. Certain Land Situated in St. Charles County, Mo., 46 F. Supp. 1921 (D.C. Mo. 19042),
reversed 139 F.2d 661, reversed 324 U.S. 49.
68
at 18 U.S.C. § 433 would likewise apply to the contract law provi-
sions at title 41 U.S.C. § 22. The provision in title 41 and the criminal
provisions discussed, and the exceptions to them, were all originally
passed as part of the same Act, 87 thus suggesting that the exceptions
■from that Act for corporate contracts were intended to apply to the
provision now codified at title 41.
The benefit which accrues to a Member of Congress from a Govern-
ment contract because a Member is a shareholder or officer of the
-corporation has been specifically exempt from the statutory prohibi-
tion since the inception of this provision. As noted in an Opinion of
the Attorney General as to provisions of the former Criminal Code
At Sections 114, 115, and 116 (now codified at 18 U.S.C. 431, 432, and
433), concerning a "substantial" stock interest of a United States
Senator in an incorporated cattle company which secured Federal
Agency loans to cattle finance companies :
The provision of section 116, specifically excepting from
the operations of sections 114 and 115 contracts made,
entered into, or accepted by any incorporated company,
where such contract or agreement is made for the benefit of
such incorporation or company, has been an integral part
of this legislation sincfl its origmal enactment * * * and is
entirely clear in its provisions. 38
A later opinion of the Attorney General dealt with a Government
contract to a firm in which the Member of Congress not only held 30%
of the outstanding stock, but of which the Member was also presi-
dent, "and presumably, therefore, the active head." 39 In this opinion,
the Attorney General found that the exemption applies in such a case
rsince Congress had not qualified the exemption on corporate contracts
sand had made "no distinction between corporations whose officers
; are Members of the Congress and those whose officers are not such
; Members, nor does [the statute] distinguish between corporations in
'which Members of the Congress hold a substantial interest in the capi-
tal stock and those in which they do not hold such interest." 40
The Attorney General in this opinion noted that although "It may
be that at the time of [the statute's] enactment the Congress did not
.contemplate the present widespread use of the corporate form and
therefore did not have in mind situations such as the one now pre-
sented", nevertheless the Congress had reenacted and amended those
provisions a number of times, extending and enlarging the exemptions
contained in them, and therefore apparently "acquiesced" m the
■"construction placed thereon by the Attorneys General and the
•Courts * * *." 41 It was recognized by the Attorney General, how-
ever, that the possibility for abuse exists within this exemption.
"Further, the auestion of whether the act of incorporation for the
obvious purpose of circumventing the statute's prohibition would
give rise to a cause of action under these provisions, and justify a
"piercing of the corporate veil", was left open by the Attorney
General. 42
»' See Revised Statutes §§ 3739-3741, April 21, 1808, 2 Stat. 484, C. 48.
« 33 Op. Atty. Gen. 44, 48, October 29, 1921.
■»• 39 Op. Atty. Gen. 165, 167, May 19, 1938.
<• Id. at 167-168.
« Id. at 170.
« Id. at 170-171.
69
In addition to exempting contracts made with a corporation from
the prohibition of a Member contracting with the Government, the
statutory provision at 18 U.S.C. § 433 also specifically provides that
the prohibition will not apply to contracts, loans or other agreements
made or entered into under:
The Reconstruction Finance Corporation Act, the Agri-
cultural Adjustment Act, the Federal Farm Loan Act, the-
Emergency Farm Mortgage Act of 1933, the Farm Credit
Act of 1933, or the Home Owners Loan Act of 1933, the-
Farmers' Home Administration Act of 1946, the Bankhead-
Jones Farm Tenant Act, or to crop insurance agreements or
contracts or agreements of a kind which the Secretary of
Agriculture may enter into with farmers.
Other statutory provisions of Federal law specifically note that
the requirement of excluding Members of Congress from benefits
arising from a Federal contract, stated at 41 U.S.C. § 22, is applicable
to the acquisition of land by the Government under flood control
policies and procedures, 43 but is not applicable to contracts entered
into under the .United States Information and Educational Exchange
Program. 44 ,
Private Foundations. Tax penalties may arise if Members of the
House engage in acts of "self-dealing" with a "private foundation"^,
Provisions of the Internal Revenue Code at 26 U.S.C. § 4941 prohibit
certain dealings, such as those involving the receipt of compensation
or certain expenses, with a "private foundation" by some government
officials, including elected officials in the legislative branch. The tax
sanctions include an imposition of an excise tax on both the sell-
dealer and the manager of the foundation, which increase in size i!
the original matter is not rectified within a certain time, or for re-
peated or willful and flagrant violations.
Foreign Governments. Members of the House are prohibited,, as are
other Federal officials and employees, by the United States Consti-
tution at Article I, Section 9, clause 8, from receiving an "emolument"
of "any kind whatever" from a foreign government or a representative
of a foreign state, without the consent of the Congress. An "emolu-
ment" is generally defined as "any profit, gain, or compensation
received for services rendered." 45
This provision was introduced during the debates of the Constitu-
tional Convention in August of 1787 by Mr. Pinckney of South Caro-
lina. As noted in "Elliot's Debates": "Mr. Pinckney urged the
necessity of preserving foreign ministers, and other officers of the
United States, independent of external influence," and introduced
this provision which passed without objection. 46
The general principle behind this constitutional prohibition was
stated briefly by Justice Joseph Story in his historic work, "Com-
mentaries on the Constitution of the United States": "The other
clause, as to the acceptance of any emoluments, title, or office, from
foreign governments, is founded in a just jealousy of foreign influence
«33 U.S.C. $ 702m.
« 22 U.S.C. § 1472.
«49 Comp. Gen. 819, 820 (1970); B-180472, March 4, 1974; B-180472, May 9, 1974.
« "Elliot's Debates," Volume V, p. 467.
70
of every sort." 47 As noted by the Comptroller General, "it seems clear
from the wording of the constitutional provision that the drafters
intended the prohibition to have the broadest possible scope and
applicability." 48
Thus, congressional consent, generally in the form of private or
public bills, would be required before an honorarium or other income
or compensation may be accepted by a Member of Congress from
foreign governments, or organizations or persons representmg or act-
ing as an instrumentality of a foreign state. Under this provision, for
example, the Comptroller General has found that transportation, or
expenses for travel given a Member of Congress by a foreign govern-
ment, if gratuitously given, would constitute a gift to that Member
and fall within the regulations promulgated on the receipt of foreign
gifts. However, if such transportation or expenses for travel were of-
fered a Member by a foreign government in return for and in connec-
tion with some service which the Member has provided or will be
performing, such as a speech, article or appearance, then such travel
or expenses may constitute "compensation" and thus an "emolument"
to the Member. 49 Although Congress has consented by statute to the
acceptance of certain "gifts" or "decorations" of minimal value, and
other gifts under special circumstances, from foreign govmments by
Federal officers and employees, no such general consent for the receipt
of emoluments or other compensation from foreign governments was
granted by Congress to present Federal officials or employees under
the provisions of the Foreign Gifts and Decorations Act or any other
statute. 50
Members of Congress are therefore prohibited from receiving any
payment for their services rendered to official foreign interests, such
as from ambassadors, embassies or agencies of a foreign government, or
apparently from multinational organizations made up of foreign govern-
mental units. 51 Members should thus be cautious in accepting ex-
penses or other compensation from foreign foundations or other
foreign organizations which receive support from a foreign government,
or have such a relationship to the foreign government through spon-
sorship, funding or licensing to be considered an official arm or an
instrumentality of that government. It should be noted that the
Comptroller General of the United States has ruled, for example, that a
Member of Congress could not accept a fee from the British Broad-
casting Corporation for participation in a television program to
discuss the American Presidency since the BBC, because of its funding
relationship and regulation by the British Government, would be
considered an instrumentality of the British Government and thus a
"foreign state" under the constitutional ban. 52
Honorarium Restrictions. Members of the House are generally
permitted to accept honorariums for their personal appearances,
articles, speeches and similar services. Provisions of the House Rules,
* Story, "Commentaries on the Constitution of the United States," Vol. HI, p. 215-210.
« 49 Comp. Gen. 820 (1970).
«• Opinion of the Comptroller General, B-180472, May 9, 1974.
»»5 U.S.C §7342, as amended hy P.L. 95-105; see, however, P.L. 95-105, Section 509 (37 U.S.C. §801,
note) as to employment of retired military members and members of the reserve by foreign governments.
« Note E.0. 11446, January 16, 1969, concerning decorations from multi-national organizations; 5 U.S.C.
8 7342(a) (2), as amended by P.L. 95-105, concerning gifts from multinational organizations.
* Opinion of the Comptroller General, B-180472, March 4, 1974.
71
and Federal statutes, however, restrict the amount of honorariums
which may be accepted by a Member for a single event, and as an
aggregate in one calendar year.
The House Rule pertaining to honorariums, controlling for Members
of the House beginning January 1, 1979, specifically limits the amount
of honorarium a Member may receive to $1,000 in value, excluding re-
lated transportation, food, and lodging expenses, for any appearance,
speech or article. 63 The Rule further limits the amount of aggregate
outside earned income, including honorariums, which a Member may
receive in a calendar year to 15% of the Member's yearly congres-
sional salary. At present congressional salaries, this would limit
Members to earning a total of $8,625 in honorariums or other outside
earned income in a year. 54
The term "honorarium" within the House Rules is defined as follows:
The term "honorarium" means a payment of money or
anything of value to a Member for an appearance, speech, or
article, by the Member; but there shall not be taken into ac-
count for purposes of this paragraph any actual and necessary
travel e xpenses incurred by the Member to the extent that
such expenses are paid or reimbursed by any other person,
and the amount otherwise determined shall be reduced
by the amount of any such expenses to the extent that they
are not paid or reimbursed.
A Federal statutory provision also limits the amount of honor-
ariums which may be accepted for one event and as a yearly aggregate
by officers and employees of the Federal Government, including
Members of Congress. 65 This statute, however, allows for the accept-
ance by a Member of a larger amount of honorariums than does the
House Rule. Therefore, the more restrictive amount provided in the
House Rule would control as to Members of the House after January 1,
1979, as adopted by each new Congress. 66
The statutory provision at 2 U.S.C. § 441i, it should be noted,
prohibits Federal officers and employees from accepting "excessive"
honorariums. The statute presently limits the amount of an honorar-
ium to $2,000, excluding amounts for travel and subsistence expenses
and amounts incurred for agents fees or commissions, which may be
accepted for any appearance, article or speech; and limits aggregate
yearly honorariums to $25,000.
The term "honorarium" is not specifically denned within the statute
prohibiting excessive honorariums. However, under the regulations of
the Federal Election Commission, the agency authorized to promul-
gate regulations on this statute, 57 the term "honorarium" is defined to
mean the payment of something of value "accepted as consideration
for an appearance, speech, or article." 68 The regulations note that an
honorarium does not include payment for agents' fees or commissions,
or payment or provision for actual travel or subsistence, "including
«» House Rule XLVTK2).
» House Rule XLVII(l).
« 2 U.S.O. 5 441i.
M "Hinds' Precedents of the House of Representatives," Volume 5, chapter CXLl, "The Rules", p.
889-890
« See 2 U.S.C. § 437d, 438.
»11 C.F.R. 5110.12(b).
72
transportation, accommodations, and meals for the officer or employee
and spouse or an aide * * *." 69 The regulations further define the
terms "appearance", "speech", and "article". 60
The regulations of the Federal Election Commission additionally
provide a description of what an "honorarium" is not. The regulations
exclude from the definition of honorarium "an award", which is a
gift in recognition for some religious, educational, scientific, civil, etc.,
achievement which is given by means of a selection process with estab-
lished criteria, for which the recipient is not required to apply or to
take any specific action in competition for the award, and which does
not require the recipient to make a speech, appearance or to write an
article as a condition for receiving the award. 61 Further, an honorarium
does not include "a gift", which is described as "a voluntary convey-
ance of real or personal property which is made gratuitously, and is
not supported by consideration, and is not made to serve in place of
an honorarium or a contribution." 62 Also excluded and distinguished
from an honorarium is "a stipend", defined as "payment for services
on a continuing basis, including a salary or other compensation paid
by news media for commentary on events * * *." M
In an advisory opinion by the Federal Election Commission, the
Commission distinguished between an "honorarium" and a "stipend"
by noting that money received by a Federal official "is .considered a
'honorarium', regardless of whether it is offered gratuitously or as a
fee, if it is accepted as consideration for an appearance, speech or
article" and if such money is "accepted as a payment for a single event
or transaction and under circumstances which do not imply a contin-
uing compensatory relationship between the parties for similar
services." A "stipend", on the other hand, would be money which "is
accepted in the form of fixed or regular compensation intended as
consideration for the rendering of services, e.g., a salary." M
Thus, money received by a Member or employee of the House for an
award, a gift, a stipend, or as proceeds from the publication of a book, M
is not considered to be an honorarium under the statutes and therefore
would not be subject to this statutory limitation upon honorariums.
It should be noted that the 1976 Amendments to the Federal Elec-
tion Campaign Act, (P.L. 94-283), specifically exempt money re-
ceived as "honorariums" under 2 U.S.C. § 441i, from the definition of
political "contributions". 66 Thus, honorariums received within the
statutory limits, including "related expenses" which cover actual
expenses (see: Regulations of F.E.C., 11 C.F.R. § 100.4(b) (10)),
would not be considered political contributions to a Member/candi-
date, 67 and therefore would not incur the various statutory regulations
concerning the receipt of "political contributions."
In addition to the specific dollar limit on honorariums, House
Rule XLIII, the "Code of Official Conduct", at paragraph 5, prohibits
»Id.
«Id.
« 11 C.F.R. § 110.12(c).
«Id.
••Id.
m AO 1976-46, 40 F.R. 57756, December 11, 1975 (note modification by 1976 amendments to F.E.C.A., 41
F.R. 46416, October 20, 1976).
« Federal Election Commission Advisory Opinion, AO— 1975— 77, 40 FR 51611, November 5, 1976; see
also Congressional Record, daily ed., October 8, 1974, at page S 18526.
« 2 U.S.C. § 431 (e)(5) (I).
« Federal Election Commission Opinion Request, re AOR 1976-59, October 27, 1976.
73
Members, officers, and employees of the House from receiving honora-
riums "in excess of the usual and customary value" for the services
involved.
Moneys received as honorariums by Members of the House would be
considered income or compensation to that Member, and therefore
would incur the general restrictions on outside income and compensa-
tion by Members of Congress. Thus, moneys received as honorariums
would be subject to ethical restrictions on the use of official position
for personal gain, the earned income limitation on aggregate yearly
earnings, the restrictions on contracting or enjoying a contract with
the Federal Government, restrictions on self dealing with private
foundations, and prohibitions on the receipt of compensation from
foreign governments. Members of Congress should therefore be con-
cerned with the identity of a sponsoring person, group or organization
and the source of its funds, in the acceptance of honorariums for
speeches, articles or appearances.
Practice of Law. The practice of law by Members of Congress may
raise ethical and conflict of interest problems beyond those involved in
other outside employment undertakings. Because of the loyalty and
trust owed a client by an attorney, 68 the conflict of interest problem
of "serving two masters" may be particularly relevant in a congres-
sional law practice when the narrow private interests of a specific
client of the Member are inconsistent with the broader public in-
terests of the Member's constituency or the natiom It has been argued
that Members of Congress who engage in the outside practice of law
are susceptible to being influenced in the performance of their official
duties in Congress to favor the interests of important and lucrative
private clients, and voting records have been offered to arguably
support this contention. 6 *
When the interests of a private client are in fact inconsistent with
the interests of the general public on a particular matter, the attorney/
congressman may be in an ethical dilemma in choosing between the
public interest for which he was elected to serve or the private in-
terests which he is retained to represent. As to an attorney's loyalty
to the interests of a private client, the American Bar Association's
"Code of Professional Responsibility" states:
The professional judgment of a lawyer should be exercised,
within the bounds of the law, solely for the benefit of his
client and free from compromising influences and loyalties.
Neither his personal interests, the interests of other clients,
nor the desires of third persons should be permitted to dilute
his loyalty to his client/
The judgment of a Member of Congress in performing his official
congressional duties concerning certain legislation or other matters,
therefore, may be influenced by this required loyalty to the interests
of a private client so as not to "compromise" those interests.
However, a Member of Congress at the same time owes a duty to
represent the interests of the general public, rather than personal, pri-
vate or special interests. As stated by the Congress: "Public office is
"American Bar Association "Code of Professional Responsibility" (hereinafter referred to as ABA Code)*
Canon 6, Ethical Consideration 5-1.
" Drew Pearson and Jack Anderson, "The Case Against Congress," 1968, pp. 117-125.
* See note 68.
293-587 O - 79 - 6
74
a public trust", and thus a Member of Congress is expected to exercise
his judgment on behalf of the beneficiaries of that trust, that is, the
general public. 71 A Federal court has specifically noted that a particu-
lar criminal restriction on the practice of law by Members of Congress,
barring representation of a private client before the Government, is
intended to protect against a "breach of trust" which occurs when a
Member "shed[s] the duty of disinterested advocacy owed the
government and his constituents in favor of championing private
interests potentially inconsistent with this charge." 72
Faced with such ethical questions and potential conflicts of interest,
many Members of Congress have voluntarily refrained from the prac-
tice of law. 73 More significantly, the permissible practice of law by
present Members of Congress has been severely limited by the adoption
of new ethical rules and conduct standards in both Houses of Congress.
The Standing Rules of the Senate, it may be noted, now prohibit
a Senator from affiliating with a firm or association for the practice of
law, prohibit a Senator from allowing a firm to use his name, and per-
mit a Senator to practice law as a sole practitioner only during non-
official time. 74
Members of the House are still permitted to practice law and to
affiliate with law firms, but are restricted in the amount of income
which may be earned from their outside practice (and all other outside
earned income) to a total of 15% of their congressional salary, or
$8,625 per year. This earned income limitation, and other statutory
and ethical restraints, will work to severely limit the private practice
of law by Members of the House, and to limit the Member's con-
tinuing affiliation with a private law firm during his term of office.
Practice by Member — Certain statutory provisions restrict specific
representations or practice by Members of the House. Thus, Members
are specifically prohibited from practicing in the Court of Claims, 78
from practicing before the Indian Claims Commission, 76 or from being
employed as an attorney by contractors or charterers holding contracts
under the ^Merchant Marine Act. 77
As noted previously, Members are prohibited by a Federal criminal
statute at 18 U.S.C. § 203 from receiving any compensation, directly or
indirectly, for services before Federal agencies rendered by them-
selves or any other person. Thus, Members may not receive compensa-
tion for legal practices before Federal regulatory agencies or depart-
ments, precluding the receipt of compensation for such practices as
before the National Labor Relations Board, the Internal Revenue
Service, the Federal Trade Commission, the Interstate Commerce
Commission, the Federal Communications Commission, and other
departments, agencies, and officers of the Federal Government. The
statutory provision at 18 U.S.C. § 203, however, does not preclude the
™ Code of Ethics for Government Service, 72 Stat, part II, B 12, paragraphs 10, 5 ; See
H. Rpt No. 95-1837 supra at p. 3.
« United States v. Podell, supra at p. 1042.
» U.S. News and World Report vol. 83, p. 39, "Putting a Lid on Lawyers 1b Congress,'
Sept 12, 1977. Reportedly there were approximately 38 Members In the House practicing
law In 1976. ' .
. ■>* Senate Rule XLV( 6).
*■ 18 U.S.C. « 204. ....
w 25 U.S.C. I 70.
"46 U.S.C. 11223(e).
75
receipt of compensation for legal practice before a court of law, even
when the United States is a party or is interested in the proceeding. 78
The prohibition within section 203, upon receiving compensation for
any service rendered before a Federal agency, and other statutory and
ethical provisions, bears directly on the propriety and efficacy of a
Member of the House retaining his affiliation with and interest in a
private law firm during his term of office.
Affiliation with firm — As to retaining an interest in a private law
firm, it should be noted initially that the American Bar Association
"Code of Professional Responsibility" has promulgated disciplinary
rules on what have been called "facade" law practices. This would be
where a member of the firm, a Member of Congress for example, ac-
tually does little or no practice in the firm but retains his name in the
title, letterhead and announcements of the firm, often for purposes of
prestige of the firm in attacting clients. The etlucs of receiving com-
pensation merely for the use of a Member's name by a law firm for
prestige purposes, rather than for actual services performed, have been
questioned by congressional sources. In addition to possibly misrepre-
senting a Member's actual participation in the activities of the firm, or
misleading the public as to the firm's influence because of the Member's
affiliation, such an arrangement may give the appearance that the
Member is receiving compensation or benefits merely because of the
influence and prestige of his position in Congress, rather than for any
•services performed. 79
Even where no compensation is received by the Member for his
affiliation with a firm, the American Bar Association has prohibited
the "facade" of retaining a Member's name in the firm when the
Member is not actively and regularly practicing as a member of the
firm:
A lawyer who assumes a judicial, legislative, or public
executive or administrative post or office shall not permit
his name to remain in the name of a law firm or to be used
in the professional notices of the firm during any significant
period in which he is not actively and regularly practicing law
as a member of the firm, and during such period other mem-
bers of the firm shall not use his name in the firm name or
in professional notices of the firm. 80
Additionally, Ethical Consideration 2-12 of the "Code of Professional
Responsibility" states :
A lawyer occupying a judicial, legislative, or public execu-
tive position who has the right to practice law concurrently
may allow his name to remain on the name of the firm if he
actively continues to practice law as a member thereof.
The continued affiliation of a Member with a law firm may there-
fore raise another dilemma for the Member. The Member, under ethical
rules promulgated by the American Bar Association, must regularly
and actively practice law with the firm to prevent the problems of the
» See note 28.
* Report of a Subcommittee of the Committee on Labor and Public Welfare, United States Senate,
■"Ethical Standards in Government", Committee Print, 82d Congress, 1st Session, p. 25.
l » ABA Code, DR 2-102(B).
76
prohibited "facade" law practice. However, such time and attention
to an outside law practice may create a "time" conflict with the
Member's official position and duties in the Congress, which is under-
stood to be a full time commitment by the Member, requiring a
"Member's full-time attention to his official duties". 81
In some instances the American Bar Association has noted that
persons who are to serve in a governmental post temporarily may take
a leave of absence from the firm and maintain their name in the
firm. Thus, if a person intends to hold office only temporarily and then
return to his position in the firm, his name may apparently be retained
if he is not precluded from practice by law or regulation and "proper
precautions are taken not to mislead the public as to his degree of
participation in the firm's affairs". 82
A Federa 1 statutory provision, it should be noted, bars an individual
firm, or corporation practicing before a Federal agency from using-
the name of a Member of Congress in "advertising" the business. 83 It
appears, however, that the listing of an individual's name on the letter-
head of a law firm's stationery and the inclusion of an individual's
name in the name of a firm would not be "advertising" in violation
of the statute as far as the term "advertising" is generally used in
relation to attorneys. 84 The statutory provision, at 5 U.S.C. §501,
was derived with little change from a 1916 provision which referred ta
"advertising" in the commercial sense and was specifically intended to
prevent the practice of individuals or firms, particularly those prac-
ticing before the patent office, from soliciting complimentary state-
ments from Members of Congress and then using such statements for
the purpose of endorsing and advertisting the individual's or firm's
business. 85 However, even though participation by a Member of Con-
gress or the retention of a Member's name in a legal partnership, firm,
or corporation which practices before Federal agencies may not tech-
nically violate 5 U.S.C. § 501, such an arrangement may encounter
difficulties under Federal criminal law at 18 U.S.C. § 203.
Federal Practice by Partners, Firm— The statutory provision at 18
U.S.C. §203, which, as discussed above, prohibits a Member of
Congress from receiving compensation for services rendered before
a Federal agency, department or commission, also prohibits a Member
from directly or indirectly receiving compensation for services rendered
by himself or another before such bodies. Thus, if a Member of
dongress has an arrangement with a partner or legal firm where comp-
ensation for activities by partners or the firm would accrue to the
Member of Congress as a participating partner or member of the firm,
such an arrangement, where compensation accrues to the Member of
Congress for services by the firm before a Federal agency, may be in
violation of the criminal provision of Federal law at 18 U.S.C. § 203.
Recently, it may be noted, a former Member of Congress has been
indicted for allegedly receiving compensation from a client/hospital
for services rendered before Federal agencies by law firms with whklk
the Member was affiliated or connected in some way. 86
" H. Doc. 95-73, supra at p. 10; see also H. Rpt. No. 95-1837, supra at p. 29.
n ABA Opinion No. 318 (1967).
m 5 tJ.S.C; § 501. -
m AB A Code, Cannon 2, E.C. 2-9, 2-10, and t) R 2-101, 2-102.
» House Report No. 364, 64th Congress. 1st Session; Congressional Record, April 17, 1916, pp. 6312-6314^
« United Statu v. Eilberg, Criminal No. 78-311, (D.C E. Pa. 1978).
77
As to the practice of law before Federal agencies by law firms with
which a Member of Congress is affiliated, the House Committee on
Standards of Official Conduct in Advisory Opinion No. 1, January 26,
1970, advised Members concerning the prohibition of 18 U.S.C. § 203:
The Committee emphasizes that it is not herein interpret-
ing this statute but notes that the law does refer to any
compensation, directly or indirectly, for services by him-
self or another. In this connection, the Committee sug-
gests the need for caution to prevent the accrual to a Member
of any compensation for any such services which may be per-
formed by a law firm in which the Member retains a residual
interest.
The Department of Justice has also noted in an informational letter
that section 203 "bars a partner in a law firm from sharing in any fees
received by the firm for representational activities performed by the
firm before any department or agency during the time he is or was a
Federal employee" or official. Although such a fee sharing or partner-
ship arrangement might be violative of section 203 when the firm
participates in a Federal practice, the Department of Justice was of
the opinion that an arrangement other than one where the Federal
officer or employee shares in the profits of the firm, such as where he
receives a fixed salary, may be permitted under the law even when the
firm receives some fees for Federal practice. The Justice Department
stated that "this office has interpreted § 203 not to apply to a person
who receives a fixed salary as an employee of a firm (as opposed to
someone who shares in the firm's profits), even though some of the
firm's overall income may be attributable to service covered by
§ 203." 87
In addition to a Member of Congress receiving compensation as a
salaried "employee", rather than as a partner in a law firm with a
TTederal practice, other devices might be employed in an attempt to
circumvent the problem of the receipt of compensation by a Member
■of Congress for services rendered by partners before Federal agencies.
Since the receipt of compensation for such services is a necessary
element of the offense, 88 a firm might attempt to establish a separate
iDookkeeping arrangement where the Member of Congress would only
share in the fees received for non-Federal matters, and not share in the
compensation the firm receives for its Federal practice. Question may.
arise in this situation, however, as to the effectiveness or "tightness"
of an internal bookkeeping system to prevent the Member from sharing
in the firm's compensation received from its Federal practice. Argu-
ments could be raised that general revenues to a firm from its Federal
practice, although not accruing directly to the Member, are benefit-
ting the firm as a whole and thus the Member in particular as a partner
who shares in the general success or failure of his firm.
t Another device employed to circumvent the problem of compensa-
tion accruing to a Member for a firm's Federal practice has been the
establishment of a "dual partnership", that is, one "non-Federal
practice" partnership with which the Member of Congress is associ-
ated, and one partnership which excludes the Member of Congress
" See note 33.
• May v. United States, supra.
7S
and which engages in practice before Federal agencies. Although such
dual partnership arrangements might in some instances technically
circumvent the § 203 problem, 89 the ethics of such a situation has
been increasingly questioned, particularly with regard to the American
Bar Association "Code of Professional Responsibility." That Code,,
at Disciplinary Eule 5-105 (D) states specifically :
If a lawyer is required to decline employment or to with-
draw from employment under DR 5-105 [conflicts of interest],
no partner or associate of his firm may accept or continue such
employment.
Thus, since a Member is prohibited from such "employment" before-
Federal agencies (that is, barred from receiving compensation for
such services), it may be argued that a Member's partners and associ-
ates are likewise barred from such employment and compensation.
The apparent reasoning behind such a prohibition concerning the-
avoidance of conflicts of interest by an attorney or his partners was
expressed in an opinion of the American Bar Association Committee-
on Professional Ethics: "The relations of partners in a law firm are
so close that the firm, and all the members thereof, are barred from
accepting any employment, that any one member of the firm is
prohibited from taking." 90
Discussing the ethics of such arrangements, the Association of the
Bar of the City of New York in its work "Congress and the Public
Trust," offered the following observations and conclusions:
While the use of two firms allows a Member's partners to
accept Federal matters without violating Section 203, the
ethics of such arrangements pose a different question. For
conflict-of-interest purposes, it is well settled that neither
a firm nor any member may accept employment which any
member of the firm cannot properly accept * * *.
Under this reasoning, individual partners of a Member
of Congress and other firms to which they belong should
be precluded from any employment forbidden to the Member
as a conflict of interest. Federal law supplies the conflict
rule which disqualifies the Member [18 U.S.C. § 203], and
the legal profession, basing its attitude upon its knowledge
of the partnership relation, follows a principle which dis-
qualifies his partners. [See DR5-105(D), ABA Code of
Professional Responsibility]
It must be admitted, however, that the legal profession has
never moved against such dual arrangements of lawyers in
Congress * * *.
Whether or not such dual arrangements technically
comply with formal rules of ethics their appearances are
damaging to the public, the Congress, and the legal pro-
fession. Under the higher-than-market-place standards which
lawyers and Members of Congress should follow, we strongly
recommend that those law firms which include Members of
»»40 Op. Atty. Gen. 287 (1943); New York City Bar Association, Committee on Professional Ethics,,
'nions, No. 803, 19 The T
Opinion No. 33 (1931).
Opinions. No. 803, 19 The Record 424 (1964)
79
Congress who continue to practice for any reason terminate
any such dual arrangements and accept no employment
forbidden to the Member of Congress * * *.
The Federal agencies before which a Congressman's
partners practice are creatures of Congress. The Member
of Congress votes on their appropriations and writes the
statutes they administer. Federal officials may be influ-
enced by a Congressman's partner's appearance in much the
same way they would be influenced by the Member himself. 91
Other General Rules. — If a Member does engage in the practice of
law during his term in office, the Member should be aware that in
addition to the limitation on outside earned income and the restrictions
on particular practices discussed above, the general regulations on out-
side compensation by Members would generally apply. That is, in
addition to barring the receipt of compensation for services before
Federal agencies, the Member should not accept compensation because
of influence improperly exerted from his position in Congress; may not
accept compensation from foreign governments; and may not hold or
enjoy contracts with the United States Government. Further, the
American Bar Association has promulgated ethical standards and
Disciplinary Rules which would be applicable to attorneys who hold
public positions.
Canon 9 of the American Bar Association "Code of Professional
Responsibility" provides generally that: "A lawyer should avoid even
the appearance of professional impropriety." More specifically, Dis-
ciplinary Rule 8-101 provides:
DR8-101 ACTION AS A PUBLIC OFFICIAL
(A) A lawyer who holds public office shall not:
(1) Use his public position to obtain, or attempt to
obtain, a special advantage in legislative matters for
himself or for a client under circumstances where he
knows or it is obvious that such action is not in the
public interest.
(2) Use his public position to influence, or attempt
to influence, a tribunal to act in favor of himself or of a
client.
(3) Accept anything of value from any person when
the lawyer knows or it is obvious that the offer is for
the purpose of influencing his action as a public official.
Financial Disclosure. Under the provisions of the "Ethics in Gov-
ernment Act of 1978", 92 Members of Congress must file annual
personal financial disclosure statements with the Clerk of the House
by May 15 of each year. In addition to various information required
to be disclosed (which is discussed in a later chapter), Members must
disclose information concerning income and compensation. The source,
type, and amount of all income (other than dividends, interest, rent,
and capital gains which are listed separately) from any source must be
listed. Income from current employment by the United States Govern-
ment need not be reported. Honorariums aggregating $100 or more
M Association of the Bar of the City of New York, Special Committee on Congressional Ethics, "Congress
and the Public Trust", New York 1970, James C Kirby, Jr., Executive Director, pp. 112, 113, and 115.
« P.L. 95-521.
80
from any source in the preceding year must be included as to the
source, date, and amount. 93
Income in the form of dividends, interest, rent, and capital gains
exceeding $100 is to be listed as to the source and type and the cate-
gory of amount into which it falls: not more than $1,000; greater than
$1,000 but not more than $2,500; greater than $2,500 but not more
than $5,000; greater than $5,000 but not more than $15,000; greater
than $15,000 but not more than $50,000; greater than $50,000 but
not more than $100,000; or greater than $100,000. M
« 2 U.S.C. 5 702(a)(1)(A).
h 2 U.S.C. §702(a)(l)(B).
Chapter 8. OUTSIDE EMPLOYMENT AND COMPENSATION
OF HOUSE EMPLOYEES
Highlight
As to outside employment, House employees should note generally:
— they must not allow an outside job to interfere with fulfilling
and performing their official congressional duties, and so must
restrict outside employment ^o .their "free" time;
— in addition to a possible' "time"'" conflict, there may be an
inherent conflict of interest between the "substance" of one's
outside employment and one's congressional job;
— advice and opinions on*; t^te ethics-j or possible conflicts of
interest concerning outside employment should be sought from
one's supervisory personnel and from the Committee on
Standards of Official Conduct.
Employees are restricted in some specific areas of employment, and
in some areas of receiving compensation. For example, employees
may not:
— receive compensation from foreign governments;
— represent persons in a private capacity before the Federal
Government, or in a court on matters affecting the Federal
Government;
— receive honoraria in excess of specified limits, or in excess of
the usual and customary amount;
— act as an agent of a foreign principal ;
—use the influence of their position improperly to receive com-
pensation or benefits ;
— receive compensation over a certain amount for more than one
Government position;
— engage in "self -dealings" with private foundations without
incurring tax penalties.
Certain House employees are required to file annual financial dis-
closure statements detailing specific information on certain income
received, in addition to other financial information required to be
disclosed.
(81)
Chapter 8. OUTSIDE EMPLOYMENT AND COMPENSATION
OF HOUSE EMPLOYEES
There is no statutory provision under Federal law, nor Rule of the
House of Representatives, which flatly prohibits all outside or addi-
tional employment of employees of the House. General ethical stand-
ards and House Rules, however, require House employees to fulfill
their congressional duties for which they are paid, and thus would work
to allow an employee to engage in outside employment activities only
on one's "free" time. 1 Additionally, questions may arise as to an in-
herent conflict with one's official duties in relation to certain outside
employment, even if such employment is not prohibited by specific
statute or rule.
Although no general prohibition on outside employment exists,
several provisions of Federal law and House Rules work to regulate and
restrict particular outside employment activities of House employees.
"Thus, for example, House employees may not receive compensation
from foreign governments; 2 may not represent persons in a private
capacity before the Government or in court in matters affecting the
Government ; 3 are limited in the amount of honoraria which may be
received for services rendered ; 4 are prohibited from acting as an agent
for a foreign principal; 6 may not use the influence of their official
position improperly to receive compensation ; 8 and may be restricted
in dealings with private foundations. 7 Finally, certain outside compen-
sation and business transactions must be disclosed in annual personal
financial disclosure reports to be filed by employees compensated at a
rate of a GS-16 or more, and by at least one principal assistant to a
Member if no staff employee of that Member receives a GS-16's
•salary or more. 8
Performance of Congressional Duties. House employees who en-
gage in private employment activity may not do so to the neglect of
official congressional duties, nor on "official time" for which salary is
received from the United States Treasury. The Rules of the House of
Representatives specifically require that a Member not retain anyone
on his clerk hire allowance "who does not perform duties commen-
surate with the compensation he receives." 9 Additionally, the "Code
of Ethics for Government Service" states that any person in Govern-
ment service should "Give a full day's labor for a full day's pay; giving
to the performance of his duties his earnest effort and best thought." 10
1 See; "Code of Ethics for Government Service", 72 Stat, part 2, p. B12, paragraph 3; Rules of the House of
-Representatives, Rule XLIII(8).
2 United States Constitution, Art. 1, Sec. 9, cl. 8.
U8 U.S.C. §§203,205.
« 2 U.S.C. § 441i; House Rule XLIII(5).
• 18 U.S.C. §219.
• House Rule XLIII(3).
7 28 U.S.C. §§ 4941, 4946.
» P.L. 95-521, 2 U.S.C. § 701 et seq.
•House RuleXLIII(8).
10 72, Stat, part 2, B12, para. 3.
(82)
83
These provisions recognize that a House employee is hired for and is
paid from United States Treasury funds for the performance of official
•congressional duties, 11 rather than private or personal activities. Out-
side employment which detracts from the performance of, or from the
time and attention to one's Government job, would thus apparently
be contrary to these standards.
Several ethical standards apply to the relationship between one's
•congressional duties and outside compensation or employment. Gen-
erally, House employees may not improperly use their official position
to receive compensation or benefits for themselves. The Rules of the
House of Representatives specifically prohibit a House employee
from receiving compensation or allowing compensation to accrue to the
employee's beneficial interest "the receipt of which would occur by
virtue of influence improperly exerted from his position in Congress." u
Along similar lines, the Code of Ethics for Government Service pro-
hibits the use of confidential information one receives in the course of
public employment "as a means for making private profit." 13
Certain employment activities may raise questions of an inherent
■conflict of interest with one's congressional duties. Although there is no
specific statute or rule which prohibits outside employment activities of
House staffers which "conflict" with official duties, an inherent conflict
may arguably arise when an employee's official duties are directly
related to matters in which a private employer is interested, or when
an employee's private interests otherwise influence his public duties.
This principle of conflict of interest was discussed by the New York
■City Bar Association's Special Committee on Congressional Ethics
which stated: "The risk, then, is risk of impairment of impartial
judgment, a risk which arises whenever there is a temptation to serve
personal interests." 14 Although no rule specifically prohibits "con-
flicting" employment (as in the Senate Rules), 15 in drafting the Code
of Ethics for Government Service it was apparently recognized that
•outside compensation or employment may have an effect upon the inde-
pendence of, and the general performance of, official duties by Govern-
ment employees. The Code thus states specifically that an employee
should "never discriminate unfairly by the dispensing of special favors
•or privileges to anyone, whether for remuneration or not", and further
prohibits the receipt of any "benefits" by an employee "under circum-
stances which might be construed by reasonable persons as influencing
the performance of his governmental duties." 18
Professional Staff of Committees. Professional staff members of the
standing committees of the House are instructed by House Rules not
to "engage in any work other than committee business". Further, the
House Rule provides that such professional staff members "shall not
be assigned any duties other than those pertaining to committee
business." 17 Since no official interpretation or ruling on the provision
" See; Regulations of the House Administration Committee; "Regulations and Accounting Procedures
•for Allowances and Expenses of Committees, Members and Employees of the U.S. House of Representa-
tives", 95th Congress, January 1978, P. 88, paragraph 2(a), and p. 29, paragraph 2(a).
■a House rule XLIII (3).
! » 72 Stat, part 2. B 12 paragraph 8.
" "Congress and the Public Trust", James C Kirby, Jr., Executive Director, New York 1970, p. 39.
's See: Senate Rule XLV(2).
»• 72 Stat, part 2, B 12, paragraph 5.
« House Rule XI, cl. 6(a)(3).
84
is apparent, questions may arise as to whether the prohibition upon
engaging in "any work other than committee business" would pre-
clude professional staff employees from holding any outside or addi-
tional employment from their congressional job. Research into the
legislative history of this Rule, which originated from the Legislative
Reorganization Act of 1946, 60 Stat. 812, however, has failed to reveal
specific congressional intent to apply the prohibition in question to
"moonlighting" or off hours employment activity by professional
staffers. Rather, it appears that the provision was intended to insure
that professional stair members of committees would work exclusively
on committee business during their congressional working hours, as
opposed to performing "other congressional office duties". 18 As noted
in the floor debates on the provision, this was to insure a continuing
full time professional staff of experts for the standing committees. 19
Thus, absent future rulings from the House to the contrary, it
would appear that professional staff members of congressional com-
mittees are generally under similar regulations as staff employees of
House Members and other House employees with respect to outside
employment. It should be noted that the standing committees of the
House are apparently authorized to determine certain terms and con-
ditions of employment of their professional staff, 20 other than those
established or governed by specific statute or rule, and thus might
establish more stringent or restrictive regulations concerning the out-
side or additional employment of its own professional staff as the com-
mittee deems necessary for its efficient operation. Regulations of the
committees should be examined, therefore, for further guidance on
standards of conduct for the committee's employees.
Dealings With the Federal Government. Congressional employees
are generally prohibited from private representational activities on
behalf of another before the agencies of the Federal Government, or
in a court in a matter in which the United States is a party or is
interested. Criminal provisions at 18 U.S.C. § 203 prohibit employees
from receiving compensation, directly or indirectly, for any "services
rendered" before agencies of the Federal Government; and 18 U.S.C.
§ 205 prohibits employees from acting as "agent or attorney" for
someone, with or without compensation, before a Federal agency or
in court concerning a matter affecting the Government.
As to the prohibition on receiving compensation for services rendered
before a Federal agency in 18 U.S.C. § 203, it should be noted that
the prohibition extends to the receipt of such compensation "directly
or indirectly". Therefore, if a congressional employee is in a partner-
ship arrangement or otherwise shares in the fees from services rendered
before Federal agencies, a violation of this provision may occur even
if the employee did not personally perform services before the agency. 21
As noted in an informal letter opinion from the Department of Justice,
this section "bars a partner in a law firm from sharing in any fees
received by the firm before any Federal department or agency during
m Report of the Joint Committee on the Organization of Congress, pursuant to H. Con. Res. 18, "Organi-
sation of Congress", 79th Congress, 2d Session S. Rept. No. 1011, March 4, 1946, p. 10; See also Senate Rept.
No. 1015, 90th Congress, 2d Session, pp. 4-5.
» 92 Congressional Record 6442, 79th Congress, 2d Session, June 6, 1946.
M See House Rule XI, cl. 6.
21 See: Advisory Opinion of the House Committee on Standards of Official Conduct, Advisory Opinion-
No. 1, January 20, 1970.
85
the time lie is or was a Federal employee." 22 Although such fee
sharing or partnership arrangements concerning Federal agency prac-
tice would be prohibited, the statute as interpreted by the Justice De-
partment would apparently allow a congressional employee to receive
& fixed salary from a firm or organization which derives some revenue
from Federal agency practice. The Justice Department letter cited
above noted that "this Office has interpreted § 203 not to apply to a
person who receives a fixed salary as an employee of a firm (as opposed
to someone who shares in the firm's profits), even though some of
the firm's overall income may be attributable to service covered by
§ 203."
As noted above, the provisions at 18 U.S.C. § 205 would generally
prohibit a congressional employee from acting as agent or attorney
for someone before a Federal agency or a court in a matter affecting
the United States, even if the employee receives no compensation
for such activity. Although the proscribed conduct under § 205,
that is, acting as agent or attorney, might require more than mere
•"service rendered" as in § 203, it does not appear that an individual
must actually be an attorney or have a strict common law agency
relationship with another for such person's conduct to fall within the
statute. 23 Thus, House employees should avoid private representation
of persons before the Government except for those activities which
are specifically exempt from the statute, such as uncompensated
work in disciplinary or personnel proceedings, or the representation of
certain family members or persons to whom the employee acts as
personal fiduciary in certain matters not connected with the employee's
governmental duties.
Although Federal employees under § 205 may not represent another
before the Government, such employees may be permitted to represent
themselves before the Government without violating the provisions
of 18 U.S.C. § 205. 24 Thus, congressional employees would apparently
be permitted to represent themselves before agencies of the Govern-
ment for grants, aid, supply contracts or procurements, although
they could not represent others without a violation of section 205.
As to the Government entering into contracts with Federal employees
in general, the Federal Procurement Regulations state that contracts
between the Government and Federal employees, or firms substan-
tially owned or controlled by Federal employees, should not knowingly
be entered into "except for the most compelling reasons", such as
where the needs cannot otherwise be reasonably fulfilled. 25 Addition-
ally, it should be noted that the general ethical standards in the
Code of Ethics for Government Service state that an employee
"Should engage in no business with the Government, either directly
or indirectly, which is inconsistent with the conscientious performance
of his governmental duties." 26 After such a contract, grant, or employ-
ment has been negotiated by an employee for himself, the conflict
n Letter of March 14, 1978, from Leon Ulman, Deputy Assistant Attorney General, Office of Legal
Counsel, Department of Justice.
a United Siales v. Sweig, 361 F.Supp. 1148 (D.C.N.Y. 1970).
"< See: 14 Op. Atty. Gen. 483(1874); Memorandum of Attorney General, January 28, 1963, 18 U.S.C.
i 201 note, re: 18 U.S.C. §§ 203 and 205.
"41 C.F.R. §1-1.302-3.
» 72 Stat, part 2, B12, paragraph 7.
86
of interest and ethical restrictions on "time" and "subject matter"
conflicts, as well as the restrictions on dual Government pay and
employment discussed below, would of course come into effect if
the employee remains in the employ of the House.
Dual Government Employment. Problems arise if a congressional
employee seeks outside income from additional Government employ-
ment. Provisions of the United States Code dealing with dual pay and
dual employment in the Federal Government prohibit individuals
paid by the Clerk of the House from holding another Government
position if the salary of the two positions combined exceeds $7,724 per
year. 27 This provision also prohibits the receipt of pay from two posi-
tions, both paid by the Clerk of the House, if the aggregate salary
from the two House positions exceeds the maximum per annum rate
of pay authorized to be paid out of the clerk hire allowance of a Mem-
ber. 28 The dual pay provisions allow receipt of more than the $7,724
■limit for multiple employment when the positions involved are expert
or advisor positions and pay is received on a "when-actually-em-
ployed" basis for different days. 29
This limitation on receiving pay for more than one Government job-
applies specifically to more than one "position", defined in the statute
to mean "a civilian office or position (including a temporary, part-
time, or intermittent position), appointive or elective, in the legisla-
tive, executive, or judicial branch of the Government * * *." 30 When
one is hired or retained as an independent contractor for services by
the Government rather than appointed to a civilian office or position
then, the restriction on the dual employment would arguably not
apply. 31 The relationship involved in such a situation would not be-
one of employer-employee, but rather a contractual one ba,sed on an
independent contract, and thus such employment would not involve a
"civilian office or position" subject to the dual compensation pro-
visions. 32 The elements of an emplo3 r er-employee relationship, as op-
posed to an independent contractor status, have been noted by the
Comptroller General and the Civil Service Commission to include
"first, performance of a Federal function, second, appointment or
employment by a Federal officer, and third, supervision and direction
by a Federal officer." 33
Foreign Interests. Employees of the House are prohibited, as are
other Federal employees, by the provisions of the United States Con-
stitution from receiving an "emolument" of "any kind whatever"
from a foreign government or a representative of a foreign state,
without the consent of the Congress. 34 An "emolument" is generally
defined as "any profit, gain, or compensation received for services
rendered." 35 Although Congress has consented by statute to the ac-
ceptance of certain minimal "gifts" or "decorations" from foreign
governments by Federal employees, no such general consent for the
receipt of any emoluments or other compensation from foreign govern-
"5 U.S.C. § 5533(c)(1).
M5U.S.C. 15533(c)(2).
»5 U.S.C. §5533(c)(4).
M 5 U.S.C. §5531.
»• See: Metcalf & Eddy v. Mitchell, 269 U.S. 514, at 518, 519-521 (1925); "Federal Personnel Manual", Civil)
Service Commission, CK. 304, subchapter 1, section 1-4.
« See: 26 Comp. Gen. 188 (1946); 26 Comp. Gen. 442; 42 Comp. Gen. 395 (1963); Comp. Gen. Decision.
B- 174226, January 12, 1972; 27 Comp. Gen. 695 (194S).
a Federal Personnel Manual, supra.
** United States Constitution, Art. 1, Sec. 9, cl. 8.
* 49 Comp. Gen. 819, 820 (1970); B-180472, March 4, 1974; B-180472, May 9, 1974.
87
ments was granted by Congress to present Federal employees in the
Srovision known as the Foreign Gifts and Decorations Act. 38 Thus,
[ouse employees are generally prohibited from receiving any payment
for their services rendered to official foreign interests, such as from
ambassadors or embassies of a foreign government, or agencies or
instrumentalities of a foreign nation. This constitutional ban on com-
pensation from foreign governments apparently has been interpreted
to extend as well to multinational organizations made up of foreign
governmental units. 37
In addition to the prohibition on compensation from foreign govern-
ments, House employees are prohibited by statute from acting as an
agent or attorney for a foreign principal who is required to register
under the Foreign Agents Registration Act of 1938, that is, generally,
those engaged in propaganda, politics, or lobbying. 33 It should be
noted that as well as restrictions on compensation from foreign in-
terests, statutes and House Rules regulate or restrict the receipt of
gifts or campaign contributions from any foreign national. 39
Honorarium Restrictions. Employees of the House are generally
permitted to accept honorariums for their personal appearances,
articles, speeches and similar services. Federal statutory provisions,
however, restrict the amount of honorariums which may be accepted
by Federal employees for a single event, and as an aggregate in one
calendar year.
The statute at 2 U.S.C. § 441i prohibits Federal officers and em-
ployees from accepting "excessive" honorariums. The statute presently
limits the amount of an honorarium to $2,000, excluding amounts for
travel and subsistence expenses and amounts incurred for agents' fees
or commissions, which may be accepted for any appearance, article
or speech; and limits aggregate yearly honorariums to $25,000.
The term "honorarium" is not specifically defined within the statute
prohibiting excessive honorariums. However, under the regulations of
the Federal Election Commission, the agency authorized to promulgate
regulations on this statute, 40 the term "honorarium" is defined to
mean the payment of something of value "accepted as consideration
for an appearance, speech, or article. 41 " The regulations note that an
honorarium does not include payment for agents' fees or commissions,
or payment or provisions for actual travel or subsistence, "including
transportation, accommodations, and meals for the officer or employee
and spouse or an aide * * *." " The regulations further define the
terms "appearance", "speech", and "article". 43
The regulations of the Federal Election Commission additionally
provide a description of what an "honorarium" is not. The regulations
exclude from the definition of honorarium "an award", which is a
gift in recognition for some religious, educational, scientific, civil, etc.,
achievement which is given by means of a selection process with
established criteria, for which the recipient is not required to apply
or to take any specific action in competition for the award, and which
m 5 U.S.C. § 7342, as amended by P.L. 95-105.
17 Note E.O. No. 11446. January 16, 1969 concerning decorations from multinational organizations, 5 U.S.C.
5 7342(a)(2), as amended by P.L. 95-105, as to gifts and decorations from foreign governments.
» 18 U.S.C. § 219; see Foreign Agents Registration Act, 22 U.S.C. 5 611 et seq.
* 2 U.S.C. § 441e; House Rule XLIU(4).
*» 2 U.S.C. §438.
«> 11 C.F.R. § 110.12(b).
«*Id.
« 11 C.F.R. § 110.12(b) (2)-(4).
88
does not require the recipient to make a speech, appearance or to
write an article as a condition for receiving the award. 44 Further, an
honorarium does not include a "gift", which is described as "a volun-
tary conveyance of real or personal property which is made gratui-
tously, and is not supported by consideration, and is not made to
serve in place of an honorarium or a contribution." 46 Also excluded and
distinguished from an honorarium is "a stipend", defined as "payment
for services on a continuing basis, including salary or other compen-
sation paid by news media for commentary on events * * *." 46
In an advisory opinion by the Federal Election Commission, the
Commission distinguished between an "honorarium" and a "stipend"
by noting that money received by a Federal official "is considered an
'honorarium', regardless of whether it is offered gratuitously or as a
fee, if it is accepted as consideration for an appearance, speech or
article" and if such money is "accepted as a payment for a single
event or transaction and under circumstances which do not imply a
continuing compensatory relationship between the parties for similar
services." A "stipend", on the other hand, would be money which
"is accepted in the form of fixed or regular compensation intended as
consideration for the rendering of services, e.g., a salary." 47
Thus, money received by an employee of the House for an award, a
gift, a stipend, or as proceeds from the publication of a book, 48 is not
considered to be an honorarium, and therefore would not be subject to
this statutory limitation upon "honorariums".
Private Foundations. Tax penalties may arise if certain employees
of the House engage in acts of "self -dealing" with a "private founda-
tion". Provisions of the Internal Revenue Code at 26 U.S.C. §4941
prohibit certain dealings, such as those involving the receipt of
compensation or certain expenses, with a private foundation by some
government officials, including employees of the House who receive
a salary of at least $15,000 per year. The tax sanctions include an
imposition of an excise tax on both the self-dealer and the manager
of the foundation, which increase in size if 'the original matter is not
rectified within a certain time, or for repeated or willful and flagrant
violations.
Financial Disclosure Reports. Employees of the House who receive
a salary equal to a GS-16 or more, and at least one principal assistant
to a Member if no staff employee of that Member receives at least a
GS-16 salary, must disclose certain outside compensation and business
transactions in annual personal financial disclosure reports filed with
the Clerk of the House by May 15 of each year. The reports must
detail financial information for the preceding year concerning several
specified areas: income; gifts and reimbursements; financial holdings;
debts; transactions in property or securities; positions held in business-
es or organizations ; and arrangements or agreements for continuing
compensation, benefits or future employment. An employee newly
coming into a covered position must file the required disclosure
statements within 30 days after assuming his position.
"11 C.F.R. § 110.12(c)(1).
«11 C.F.R. §110.12(c)(2).
"11 C.F.R. § 110.12(c)(3).
« AO 1975-46, 40 FR 57756, December 11, 1975 (note modification by 1976 Amendments to F.E.C.A.,
41 FR 46416, October 20, 1976).
n Federal Election Commission Advisory Opinion, AO 1975-77, 40 FR 51611, November 5, 1976; see also
Cong. Roc., daily ed., Oct. 8, 1974, at page S18526.
Chapter 9. FINANCIAL INTERESTS AND DISCLOSURE
Highlight
Generally, it has been recognized that the financial investments
and holdings of Members, and to a lesser degree employees, of the
House may raise conflicts of interest in relation to the performance of
official duties. However, Members and employees are not required to
divest assets upon entering their position or employment. Addition-
ally, Members are not mandatorily disqualified from voting on issues
affecting personal financial interests. Public financial disclosure was
seen as the major regulation and deterrent to financial conflicts of
interest.
Specifically, as to financial interests, Members and certain House
employees :
— must file personal financial disclosure statements by May 15
of each year detailing specific financial information concern-
ing themselves and their spouse and dependent children;
— may establish "blind trusts" to which assets may be trans-
ferred in an effort to eventually avoid conflicts of interest
which may arise because of financial holdings ;
— are prohibited, as are all Members, officers and employees of
the House, from improperly using their official positions in
Congress for their own personal gam.
A Rule of the House concerning abstention from voting because of
a direct personal or pecuniary interest in a matter might in some
instances apply to the financial investments of a Member, generally,
when the Member is affected as an individual rather than as a member
of a class.
(89)
293-587 O - 79 - 7
Chapter 9. FINANCIAL INTERESTS AND FINANCIAL
DISCLOSURE
The private financial interests and investment holdings of employ-
ees and Members of the House and their families may raise some
ethical and conflict of interest issues for such employees and Members
in the performance of their official duties. Circumstances may arise
where Members of the House must vote on legislation, or where
Members must make decisions or staff employees give opinions or
assistance in committee concerning matters which directly affect or
have substantial impact upon their personal financial interests or
holdings. Concern is expressed in these instances that a breach of the
"public trust" might occur, that is, that the personal financial interests
of the employee or Member would subtly influence his vote, opinion,
or decision, rather than having the interests of the general public or
the Member's constituency as the motivating factor or primary
influence in the decision making process of the public official.
As discussed by the New York City Bar Association in its work
entitled "Congress and the Public Trust":
The evil is not only the possibility or appearance of private
gain from public office, but the risk that official decisions,
whether consciously or otherwise, will be motivated by
something other than the public's interest. The ultimate
concern is bad government, which always means actual
harm to the public.
*******
The evil, then, is risk of impairment of impartial judg-
ment, a risk which arises whenever there is a temptation
to serve personal interests. The quality of specific results
is immaterial. In this sense, conflict-of-interest regulation
is true to the fiduciary principle. Like other fiduciaries, such
as guardians, executors, lawyers, and agents, the public
trustee has a duty to avoid private interests which cause
even a risk that he will not be motivated solely by the
interests of the beneficiaries of his trust. 1
Federal statutes, regulations or rules of the House, however, do
not specifically prohibit a Member or an employee of the House from
holding a financial asset or interest which might "conflict" with or
influence the performance of the Member's or employee's official
duties. Even the House Rule limiting the amount of income a Mem-
ber may receive in a year is applicable only to "earned" income, and
not income from financial assets, investments, or other equity. 2
' "Congress and the Public Trust," Report of tho Association of the Bar of the City of New York Special
Committee on Congressional Ethics, James C Kirby, Jr., Executive Director, New York 1970, pp. 38-39.
2 Rules of the House of Representatives, House rule XLVII.
(90)
91
Certain House Rules and ethical standards may apply in some
instances, however, to some particular aspect of outside financial
interests. Specifically, Members and employees of the House are
prohibited from using their official position in the Congress for their
own personal gain. 3 Additionally, in some rare instances, the House
rule pertaining to abstentions from voting where the Member is
personally interested might be applicable. 4
The statutory provisions requiring annual personal financial dis-
closure by Members and certain employees do relate directly to
financial interests, investments and assets. 5 Financial disclosure pro-
visions were seen as the major regulation and monitor on possible
conflicts of interest due to outside financial holdings, after proposed
requirements for divestiture of potentially conflicting assets, or
mandatory disqualifications from voting by Members were rejected
as impractical or unreasonable. 6
As for Members of the House, although it was apparent that poten-
tial conflicts of interest may exist between a Member's official duties
and his personal financial interests, it was recognized that Members of
Congress will enter public service owning assets and having private
investment interests like other citizens in the general public. Members
of Congress could not be expected to "fully strip themselves of worldly
goods. 7 " Even a proposed selective divestiture of potentially "con-
flicting" assets raises problems in the legislative branch because unlike
many positions in the executive branch of Government which are
concerned with administration and regulation in a particular area, or
with regard to a particular subject, e.g., aviation, communication,
shipping, etc., the area in which a Member of Congress must exercise
decision making duties concerning legislation covers nearly the entire
spectrum of business and economic endeavors. Thus, a neat divestiture
of those interests which may present a conflict with official duties is
not as practical in the legislative branch as in the executive branch of
Government. The wisdom of divestiture in general has been ques-
tioned in some quarters in that it was feared that such divestiture of
interests and ownerships could isolate or insulate a legislator from the
personal and economic interests that his constituency or society in
general has in governmental decisions and policy. 8
Mandatory disqualification of a Member from voting because of a
financial interest in a matter under consideration was also rejected as a
solution to the potential conflict of interest problem raised by outside
financial interests. In our representative form of government, it was
felt that such disqualification would constitute an undesired disenfran-
chisement of a Member's entire constituency. 9 It has been noted that
a Member may often have a community of interest with his constit-
uency, may arguably have been elected because of, and to serve such
common interest, and thus would be ineffectual in representing the
real interests of his constituents if he were forced to De disqualified
from voting on issues touching those matters of common interest*
s House Rule XLIII(3); Code of Ethics for Government Service, 72 Stat, part II, B 12, para. (5).
'House RuleVHI(l).
« P.L. 95-521, 2 U.S.C. § 701 et. seq.
• See House Documents No. 95-73, 95th Congress, 1st Session, "Financial Ethics," Communication from
the Chairman, Commission on Administrative Review, pp. 9-10.
7 "Congress and the Public Trust," supra at p. 47.
« See, for example, Wisconsin Statutes Annotated, § 19.45(1), 1975 Supplement.
• H. Doc. No. 95-73, supra at p. 9.
92
Further, formulas for determining a disqualifying interest in a par-
ticular entity affected by legislation, or formulas to determine the
specific degree of interest or the required impact or effect of legislation
on such entity for disqualification to be required, are difficult to es-
tablish to any practical degree.
Thus, public disclosure of assets, financial interests and investments
was seen as the preferred method for regulating possible conflicts of
interest of Members of the House, and certain congressional staff. It
was felt that public disclosure will provide the necessary information
to allow a Member's constituency to judge his official conduct as to
possible financial conflicts with his private holdings, and would provide
necessary information to flag potential conflicts of employees. Review
of a Member's conduct by way of elections every two years was seen
as an effective deterrent and regulation on potential conflicts of Mem-
bers. As stated by the House Commission on Administrative Review
of the 95th Congress in recommending broader financial disclosure re-
quirements in lieu of other regulations on investment income :
In the case of investment income, then, the Commission's
belief is that potential conflicts of interest are best deterred
through disclosure and the discipline of the electoral process.
Other approaches are flawed both in terms of their reason-
ableness and practicality, and threaten to impair, rather than
to protect, the relationship between the representative and
the represented. 10
Under the disclosure provisions, one method of conflict of interest
avoidance which has been prof erred is the creation of "blind trusts"
by Federal officials, including Members and covered employees of the
House. The theory behind the creation of such blind trusts is that
officials will place financial assets in the trust under the exclusive
control of an independent trustee. Eventually, through sale of existing,
and acquisition of new assets, the identity of the specific assets and
ownerships of the official in the trust will be unknown to the official
and will thus be eliminated as a factor in influencing his official
decision making.
Use of Office for Personal Gain. One area of outside investments
and financial interests which is regulated by the House Rules and ethi-
cal standards is the use of one's position in the Congress for one's
personal gain. House Rule XLIII(3) provides that a Member or an
employee may not receive any compensation or allow any compensa-
tion to accrue "to his beneficial interest from any source, the receipt
of which would occur by virtue of influence improperly exerted from
his position in the Congress." The practical effect of this Rule would
apparently be to examine certain financial transactions and benefits
received by a Member or an employee to determine if such person
has "used his political influence, the influence of his position to make
pecuniary gains." "
Members and employees of the House are further instructed by the
provisions of the Code of Ethics for Government Service never to
"discriminate unfairly by the dispensing of special favors or privileges
to anyone", nor to accept "benefits under circumstances which might
'•Id.
" Congrtstional Record, April 3, 1968, p. 880, comments by Representative Price.
93
be construed by reasonable persons as influencing- the performance of
his governmental duties." 12 Thus, as noted in a preceding chapter,
this provision would apparently look to the relationship between the
receipt of benefits from a private source and the official duties or acts
of a Member or an employee as to any appearances of possible impro-
prieties, undue influences, or breaches of the public trust in violation
of this provision which, as noted by the House Committee on Stand-
ards of Official Conduct, works to "prohibit conflicts of interest and
the use of official position for any personal benefit." 13
The Standards of Official Conduct Committee in the 94th Congress
has found that the ethical standard prohibiting the use of one's official
position for personal gain, specifically the provision barring the
receipt of benefits under circumstances which may be construed as
influencing the performance of one's governmental duties, may be
violated when a Member seeks benefits froin an organization when
the Member in his official capacity had actively promoted the estab-
lishment of that organization. Thus, the Committee found that the
standard was not observed when a Member of the House "during
the period of time [the Member] was active in promoting the establish-
ment of a * * * Bank [on a military base] he approached * * * orga-
nizers of the Bank and inquired about the possibility of purchasing
stock [and subsequently purchased 2500 shares of the Bank's privately
held stock] in the bank in which he had been active in his official
position in establishing." H As noted by the Committee in its report
on the matter: "If an opinion had been requested of this Committee in
advance about the propriety of the investment, it would have been
disapproved. 15 " This conduct constituted one charge against a
Member reported by the Standards of Official Conduct Committee
to the full House, which accepted the Committee's recorninenJii lions
and officially reprimanded the Member.
The Standards of Official Conduct Committee further found viola-
tions of ethical principles forbidding the use of public office for private
gain when a Member sponsors narrow legislation to specifically deal
with a personal financial interest of the Member. The Committee
noted here:
[The Member] sponsored legislation in 1961 to remove a
reversionary interest and restrictions on the commercial
development of land ... in which he had a personal finan-
cial interest by virtue of his stock ownership in two corpora-
tions that held leasehold interests in such land, without
disclosing such interest to Congress at any time during con-
sideration of the legislation.
The standard of ethical conduct that should be observed
by Members of the House, as is expressed in the principle
in the Code of Ethics for Government Service, and which
prohibits conflicts of interest and the use of official position
for any personal benefit, was not observed by [the Member]
in sponsoring the legislation. 16
« 72 Stat, part II, B 12. para. 5.
» House Report No. 94-1364, 94th Congress. 2d Session, "in the Matter of a Complaint Against Representa-
tive Robert L. F. Sikes,", Report by the Committee on Standards of Official Conduct, p. 4.
'« Id. at p. 3, 18-21.
>«Id. at p. 4.
'« Id. at p. 3-4.
94
The Committee did not recommend congressional discipline on this
particular charge, however, because of the great lapse of time between
the conduct and the consideration by the Committee. Nevertheless,
the Committee did state that "If such had occurred within a relatively
recent time frame and had just now become a matter of public know-
ledge, the recommendation of some form of punishment would be a
matter for consideration of the Committee." 17
Other ethical or statutory restrictions relate to the use of confi-
dential information received in the performance of one's official duties
for the purpose of making private financial gains. The Code of Ethics
for Government Service provides generally that a Member or
employee should "[n]ever use any information coming to him confi-
dentially in the performance of governmental duties as a means for
making private profit." More specifically, statutory provisions pro-
hibit the use of inside information received from the Commodity
Futures Trading Commission for trading in commodity futures or in
actual commodities; 18 and prohibit the use of any confidential infor-
mation received by virtue of one's public position in speculating on
any commodity exchange. 19
Voting on Matters of Personal Interest. As noted above, no provi-
sions of statute or rule presently require the divestiture of private
assets or holdings by Members or employees of the House upon enter-
ing their official position. Since legislation considered by Congress
affects such a broad spectrum of business and economic endeavors,
a Member of the House may find himself voting on legislation which
"would have an impact upon a personal economic interest of the
Member. This may arise, for example, in a bill authorizing appropria-
tions for a project for which the Government contract is held by a
corporation in which the Member is a shareholder, or a bill providing
Federal guarantees for municipal securities when a Member is among
those holding such securities. Such interests in legislation, however,
have not been found under House precedents to be disqualifying
interests under the Rule of the House which instructs Members to
vote on each question presented unless "he has a direct personal and
pecuniary interest in the event of such question". 20 It has generally
been found that "where legislation affected a class as distinct from
individuals, a Member might vote". 21 In some cases, it may be noted,
it was found that the rule might apply when legislation affected one
specific corporation, rather than a class of corporations or businesses.
However, House precedents have generally shown that application
of the disqualification rule is directory, rather than mandatory in
nature, and one which Members have been expected to apply or not
to apply for themselves.
The Rule in question, House Rule VIII, section 1, specifically
provides :
Every Member shall be present within the Hall of the
House during its sittings, unless excused or necessarily pre-
•' Id. at p. 5.
"7 TT.S.C. |13(e).
«» 50 App. U.S.C. §2160(0, extended to Sept. 30, 1979, see 50 App. U.S.C. §2166, P.L. 95-37
*° House Rule VIIT(l).
2i See "Rinds' Precedents of the House of Representatives" (hereinafter referred to as Hinds'), volume V,
| 5952, p. 504.
95
vented; and shall vote on each question put, unless he has a
direct personal or pecuniary interest in the event of such
question.
The explanation of this provision within the Rules of the House of
Representatives, provided as annotations to Rule VIII, section 1,
states :
It is a principle of "immemorial observance" that a Mem-
ber should withdraw when a question concerning himself arises
(V, 5949) ; but it has been held that the disqualifying inter-
est must be such as affects the Member directly (V, 5954, 5955,
5963), and not as one of a class (V, 5952 VIII, 3071, 3072;
Speaker Bankhead, May 31, 1939, p. 6359-60). In a case where
questions affected the titles of several Members to their seats,
each refrained from voting in his own case, but did vote on the
identical cases of his associates (V, 5957, 5958). And while a
Member should not vote on the direct questions affecting
himself, he has sometimes voted on incidental questions
(V, 5960, 5961). 22
Thus, as to financial interests of Members and their voting on legis-
lation affecting those interests, House precedents have held that
Members holding stock in national banks may vote on legislation
"providing a national currency and to establish free banking" since
Members "do not have that interest separate and distinct from a class,
and, within the meaning of the rule, distinct from the public interest"; 23
that veterans in the House may vote on questions of pay and pensions
in the military since such Members "did not enjoy the benefit arising
from the legislation distinct and separate from thousands of men in
the country who had held similar positions" 24 ; that the Speaker would
not rule that a Member owning stocks in breweries or distilleries
would be disqualified in voting on the proposed amendment to the
Constitution concerning the prohibition on the manufacture and sale
of liquor; 25 and that Members who were stockholders in or had inter-
ests in import businesses may vote on a tariff bill affecting the import
business smce "the bill before us affects a very large class. . . . The
Chair would be surprised if there were not hundreds of thousands of
American citizens who were stockholders in these companies. . . ." 26
Although the Rule has been found not to apply when a Member is
affected only as a Member of a class rather than as an individual,
some precedent in the House has indicated that the Rule might apply
if legislation affects only one specific corporation or business, rather
than a class or group of corporations or businesses. Thus, in the
instance of the vote on the constitutional amendment concerning
"Prohibition," although the Speaker found that a Member interested
in breweries or distilleries could vote because it affected a class of
businesses, the Speaker specifically noted: "Now if there was a bill
here affecting one institution, if you call it that, the Chair would be
" Rules of the House of Representatives, 95th Congress, § 659.
!3 Hinds' supra at § 5952, pp. 503-504.
3 < Id.
*» "Cannon's Precedents of the House of Representatives" (hereinafter referred to as Cannon's), Volume
VIII, § 3071. pp. 620-621.
"Cannon's supra at § 3072, p. 623.
90
inclined to rule that a Member interested in it pecuniarily could not
vote, but where it affects a whole class he can vote." " Similarly, in
the instance where the Speaker ruled that Members with interests in
import businesses could vote on a tariff bill, the Speaker noted that:
"Certainly it would not be within the power of the Chair to deny a
Member the right to vote except in the case where the legislation
applied to one and only one corporation." 28 In the case of an amend-
ment to a bill specifically relating to the Central Pacific Railroad, the
Speaker of the House suggested that a stockholder Member should
disqualify himself from voting, although a ruling disqualifying such
Member was not made by the Chair:
In this case if the gentleman from Massachusetts be a
stockholder in the road the Chair would rule he had no right
to vote. It differs from the case of national banks, which has
been brought up in several instances, in the fact that this is
a single corporation, and is not of general interest held
throughout the country by all classes of people in all com-
munities. . . . But if a stockholder in a single railroad cor-
poration, as in this case, has his vote challenged it would be
the duty of the Chair to hold, if he is actually a stockholder
of the road, that he has no right to vote. * * * The Chair so
decides without any knowledge in this particular case. It is
for the gentleman from Massachusetts whose delicacy the
Chair knows and cheerfully recognizes to relieve the House
from any embarrassment on that question. 29
As noted by recent applications of the Rule, however, even where
one corporation or entity is primarily affected by legislation, a Mem-
ber's interest in such corporation or entity might not be found to be
a disqualifying interest in the subject matter. In a recent application
of the Rule, the Speaker of the House found that Members holding
New York City municipal bonds were allowed to vote on a bill guar-
anteeing such securities. As noted by the Standards of Official Conduct
Committee :
House precedents establish the rule that "where the subject
matter before the House affects a class rather than individ-
uals, the personal interest of Members who belong to the
class is not such as to disqualify them from voting." This
principle was followed by the House as recently as Decem-
ber 2, 1975, when the question arose whether House Rule
VIII (1) would disqualify Members holding New York City
securities from voting on a bill to provide federal guarantees
for these securities. Speaker Albert ruled that a point of
order to disqualify Members holding such securities would
not be sustained. 30
Additionally, in a report issued on July 28, 1976, the House Com-
mittee on Standards of Official Conduct found that a Member's
ownership of 1,000 shares of common stock in a defense contractor
17 Cannon's supra at § 3071, p. 621.
•» Cannon's supra at § 3072, p. 623.
» Hinds', supra at § 5922, p. 506.
* H. Rpt. No. 95-1364, supra at p. 15.
97
corporation, out of more than 4,550,000 shares outstanding, "was
not, under House precedents, sufficient to disqualify him from voting
on" an appropriations bill authorizing funds for a project for which
the corporation was under contract with the Government to perform. 81
Finally, the precedents within the House of Representatives have
shown that the weight of authority "favors the idea that there is not
authority in the House to deprive a Member of the right to vote", 32
and that "each individual Member has the responsibility of deciding
for himself whether his personal interest in pending legislation requires
that he abstain from voting". 33
Interests in Corporations with Government Contracts. As noted
in an earlier chapter dealing with outside compensation and em-
ployment, the Federal criminal statute which prohibits a Member of
Congress from contracting with the Federal Government, or "holding
or enjoying" any Federal contract, 34 does not apply to contracts with
an incorporated company made for the general benefit of the corpora-
tion. 35 Thus, a Member of the House may be a stockholder in a
corporation, apparently even a majority stockholder and head of a
corporation, which has a Government contract, and no violation of
the statutory provision barring Members from enjoying Federal
contracts would arise. 36
Additionally, as noted in the preceding section, a Member might
not be found to have a disqualifying personal interest in legislation,
such as an appropriations bill, because of a small stock ownership in
a public corporation which has a contract to perform services for the
Government on a project funded by the bill. 37
Financial Disclosure. The major deterrent to the potential conflicts
of interest which might arise because of the personal financial holdings
of a Member or an employee of the House is the requirement of annual
public financial disclosure by certain employees and by Members,
"and the discipline of the electoral process." 38 As noted by the
House Commission on Administrative Review of the 95th Congress
in its recommendation of adoption of broader financial disclosure
requirements: "The objectives of financial disclosure are to inform
the public about the financial interests of government officials in order
to increase public confidence in the integrity of government and to
deter potential conflicts of interest." 39 The annual financial disclosure
by Members and employees of the House is presently required under
the provisions of the "Ethics in Government Act of 1978," signed into
law by the President on October 26, 1978, as Public Law 95-521.
Basically, Members of and candidates to the House, House employ-
ees receiving a salary equal to a GS-16 or more, and at least one
principal assistant to a Member if no staff employee of that Member
receives at least a GS-16 salary, must disclose certain outside com-
pensation and business transactions in annual personal financial
« Id. at pp. 14-16.
K Rules of the House of Representatives, 95th Congress. § 658; see Hinds, supra at § 5956, p. 506.
M H. Rpt. 94-1364, supra at pp. 15-16; see Congressional Record, Dec. 2, 1975, H11595 (daily ed)i
M18U.S.C. §431.
« 18 U.S.C. § 433.
"33 Op. Attv Gen. 44, October 29, 1921; 39 Op. Atty Gen. 165, May 19, 1938;
" H. Rpt. No. 94-1364, supra at pp. 14-16.
» H. Doc. 95-73, supra at p. 9.
"Id. at p. 6.
98
disclosure reports filed with the Clerk of the House by May 15 of
each year^ The reports must detail financial information for the pre-
ceding year concerning several specified areas: income; gifts and
reimbursements; financial holdings; debts; transactions in property
or securities; positions held in businesses or organizations; and arrange-
ments or agreements for continuing compensation, benefits or future
employment.
What to file
The financial disclosure reports to be filed by Members and covered
officers and employees of the legislative branch are to contain the
following items for the calendar year preceding the filing date, unless
otherwise noted. Section numbers refer to the Ethics in Government
Act of 1978, (P.L. 95-521), as codified at title 2 of the United States
Code, Section 701 et seq.
Income. — The source, type, and amount of all income (other than
dividends, interest, rent, and capital gains which are listed separately)
from any source must be listed. Honoraria aggregating $100 or more
from any source in the preceding year must be included as to the source,
date, and amount (Sec. 102(a)(1)(A)). Income from current employ-
ment from the United States Government need not be reported.
Income in the form of dividends, interest, rent, and capital gains
exceeding $100 is to be listed as to the source and type and the category
of amoimt into which it falls : not more than $1,000 ; greater than $1,000
but not more than $2,500; greater than $2,500 but not more than
$5,000; greater than $5,000 but not more than $15,000; greater than
$15,000 but not more than $50,000; greater than $50,000 but not
more than $100,000; or greater than $100,000 (Sec. 102(a)(1)(B)).
Gifts and reimbursements. — The identity of the source and a brief
description of any gifts of transportation, lodging, food or entertain-
ment aggregating $250 or more received in the preceding year, other
than the personal hospitality of an individual at his residence, must be
listed. Gifts of this nature valued at less than $35 need not be aggre-
gated for purposes of reporting (Sec. 102(a)(2)(A)).
All other gifts received aggregating $100 or more must be listed as
to the identity of the source, a brief description and the amount.
Gifts from relatives are not included in the reporting and gifts of under
$35 need not be aggregated for purposes of reporting (Sec. 102(a)(2)
CB)).
The identity of the source and a brief description of reimbursements
from any source aggregating $250 or more in the preceding year must
be listed (Sec. 102(a)(2)(C)).
Financial holdings. — Interests in property held in a trade or busi-
ness, or for investment or the production of income, which has a
value exceeding $1,000 must be disclosed as to its identity and category
of value. Personal savings accounts aggregating $5,000 or less need not
be disclosed (Sec. 102(a)(3)). The categories of value for reporting of
financial holdings, stocks, bonds, and other income producing property
are as follows :
(A) not more than $5,000;
(B) greater than $5,000 but not more than $15,000;
(C) greater than $15,000 but not more than $50,000;
(D) greater than $50,000 but not more than $100,000;
(E) greater than $100,000 but not more than $250,000; and
(F) greater than $250,000 (Sec. 102(c)(1)).
99
Debts. — Liabilities owed exceeding $10,000 excluding any mortgage
on a personal residence, car loans or loans secured by household
furniture or appliances, must be reported as to the, identity and cate-
gory of value of the liability. The categories of value are the same as
the categories for financial holdings listed above (Sec. 102(a)(4)).
Transactions in property or securities. — A description, the date, and
the category of value of any purchase, sale or exchange, exceeding
$1,000, in real property (other than one's personal residence), and in
stocks, bonds, commodity futures and other securities, must be dis-
closed (Sec. 102(a)(5)). The categories of value to be listed are those
categories described above for financial holdings and debts.
Positions held. — Covered individuals must also report the identity
of all positions held, up to the date of filing in the current year, as an
officer, director, trustee, partner, proprietor, representative, em-
ployee, or consultant of any corporation, company, firm, partnership,
or other business enterprise, any nonprofit organization, any labor
organization, and any educational or other institution. The Act does
not require the disclosure of positions held in any religious, social,
fraternal, or political entity, or any position solely of an honorary
nature (Sec. 102(a)(6)).
Agreements for continuing or future benefits. — Any agreements or
arrangements concerning future employment, leave of absence during
one's Government service, continuation of payments from a private
source, or continued participation in an employee benefit or welfare
plan of a former private employer must be described as to the parties,
dates and terms by the reporting individual (Sec. 102(a)(7)).
Newly covered legislative employees are to file the required infor-
mation concerning only income, financial holdings, debts, positions
held, and agreements for continuing compensation, benefits, or future
employment. Reports filed by such persons as to income are to cover
the filing year and the preceding calendar year, while reports on the
other items are to be current up to a specific date no more than 31
days before the date of filing (Sec. 102(b)). ..
Spouse and dependent children
Reports by covered individuals are required to contain financial
information concerning the spouse and dependent children of the re-
porting person. The information to be reported by Members and
covered legislative officers and employees concerning dependent
children and spouse, other than a spouse living separate and apart
from the reporting individual with intention of terminating the mar-
riage, are required to contain the following:
Income. — The source of items of earned income of the spouse ex-
ceeding $1,000; and the source, type and category of income exceeding
$100 received by the spouse and dependent children from any assets
held by them which are required to be disclosed under "financial
holdings" (Sec. 102(d)(1)(A)).
Gifts and reimbursements which are not received totally independent
of the spouse's relationship to the reporting individual must be dis-
closed as to the identity of the source and a brief description of gifts
of transportation, food, lodging, entertainment and reimbursements,
and as to the value and a brief description of other gifts (Sec. 102(d)
(1)(B) and (C)).
100
Financial holdings, debts, transactions in property or securities. —
All the information required to be disclosed by the reporting individual
must also be disclosed in the report concerning the financial holdings,
debts, and transactions in property or securities of such person's
spouse and dependent children, other than those items which are
certified to be the sole financial interest or responsibility of the spouse,
or child and of which the reporting individual neither derives nor ex-
pects to derive any financial or economic benefits (Sec. 102(d)(1)(D)).
Legislative employees newly coming within the provisions, and
persons becoming candidates to Congress, need only disclose informa-
tion concerning their spouse and dependent children under this
provision as to income, financial holdings, and debts (Sec. 102(d)(1)).
Blind Trusts. As part of the general information required to be
■disclosed under the Ethics in Government Act, a member or covered
employee must generally identify and provide the required details
concerning the specific assets aud holdmgs of any trust benefiting
himself, his spouse or dependent children. 40 The provisions of the
Ethics in Government Act, however, provide two exceptions to this
required disclosure of the assets and holdings within a trust benefiting
a public official or his family. In the first instance, if a trust is created
by someone other than the|public official, his spouse or children, and
the assets and the holdings #f that trust are not known to such persons,
then only the income from that trust need be reported.
The second exemption to the required reporting on the holdings
within a trust specifically allows covered employees, Members and
most Federal officials to establish what is called a "blind trust" to
which assets and financial holdings may be transferred. Subsequent
to the establishment of a blind trust in accordance with the require-
ments of the Act, only the category of income from the qualified blind
trust, and not the assets or holdings within the trust, would need be
reported by the covered official under the financial disclosure pro-
visions of the Ethics in Government Act of 1978.
The Ethics in Government Act sets out specific guidelines and
detailed requirements concerning the creation and maintenance of
blind trusts in order to insure the unconditional control and
independence of the trustee over all the assets in the trust; to prevent
the acquisition of those assets which the official is specifically pro-
hibited from holding under law or regulation; and to protect the
""blind" nature of the trust by shielding the official from knowledge
of the holdings in the trust. The Attorney General of the United
States is authorized under the Act to enforce the provisions of the
act concerning the wrongful disclosure of the assets of the blind trust
by the trustee to a beneficiary, and as to the knowing receipt or solici-
tation of information about the trust by a reporting individual.
The general principle behind the blind trust is to shield the offi-
cial from knowledge of his specific assets or holdings, and thus to
avoid potential conflicts of interest or undue influence which might
arise because of particular financial interests of the official or his
family. Assets and holdings which are originally transferred to the
trust by the official, and which are thus known to the official, will
therefore in most cases still be considered financial interests of that
« Section 102(e)(1) of P.L; 95-521j
101
official for purposes of any conflict of interest provisions under Federal
law until notice is given by the trustee that the asset is disposed of
or that the asset's value is less than $1,000. 41 Only those assets sub-
sequently acquired by the trustee for the trust would be really "blind",
and thus exempt from general conflict of interest laws. In this manner
an official could not "hide" a known conflicting asset in the trust.
When an official is prohibited by law or regulation from owning
specific assets, such assets may not even be obtained by the trustee for
the trust. This restriction relates to prohibitions on owning specific
assets, and was not intended to apply to general prohibitions on finan-
cial conflicts of interest, which would unreasonably require a daj^-to-
day knowledge by the trustee of the duties and activities of a publie
official to determine if a conflict arises. 42
SUMMARY OF REQUIREMENTS OF BLIND TRUSTS
Following is a summary listing of the requirements for blind trusts
as set out in the Ethics in Government Act of 1978. These provisions
appear in the Act at Section 102(e) for legislative branch personnel
and are codified at 2 U.S.C. § 702(e) (1).
THE TRUSTEE
The trustee of the trust must be a financial institution, an attorney,
a certified public accountant, or a broker.
The trustee must be independent from and not associated with an
interested party such that the trustee can not be influenced or controlled
by an interested party.
The trustee may not be a past or present employee of, nor an organi-
zation affiliated with, a partner of, a relative of, or involved in any
joint venture with, an interested party.
The proposed trustee must be approved by the reporting individual's
supervising ethics office.
ASSETS
Any asset transferred to the trust must be free of any restriction as
to its sale or transfer, unless specifically approved by the reporting in-
dividual's supervisory ethics office.
Any asset placed in a trust by an interested party will be considered
a financial interest of the reporting individual for purposes of Federal
conflict of interest regulations or laws, including 18 U.S.C. sec. 208,.
until disposed of by the trustee or until the value of such asset is less
than $1,000.
The" trust instrument must specifically provide that the trust will
not contain any assets which an interested party is prohibited from:
holding under any law or regulation.
THE TRUST INSTRUMENT
The trust instrument must provide that the trustee will not consult
or notify an interested party concerning management and control of
the trust.
11 See special provisio ;? and exemptions for certain presidential appointees whose no ni nation is approve*
by the Senate, section 202(0(4)^ of P-L. 95-521.
« Senate Report No. 95-639, 95th Congress, 2d Session, "Blind Trusts", p.18.
102
The trust instrument must provide that the trust will not contain
any assets which any law or regulation prohibits an interested party
from holding.
The trust instrument must provide that the trustee will notify the
reporting individual when assets transferred to the trust are disposed
of or when the value of such is less than $1,000.
The trust instrument must provide that the tax returns of the trust
are to be prepared by the trustee and not disclosed to an interested
party, other than summary information necessary for an interested
party to complete his personal tax return.
The trust instrument must provide that an interested party will
not receive any reports on holdings or sources of income except as to
•cash value, income or loss, and reports necessary for filing personal
tax returns and financial disclosure statements. No such reports
received may identify any asset or holding.
The trust instrument must provide that there will be no communica-
tion between an interested party and the trustee concerning the trust
except for written communications relating to the general financial
interests and needs of the interested parties ; notification of the trustee
of any new law or regulation which would prohibit any particular
holding or asset in the trust; or directions to a trustee to sell all of a
particular asset transferred to a trust because of a potential conflict
■of interest. '",. ~><
The trust instrument must provide 'that the interested parties will
make no effort to obtain information on the holdings of the trust.
The proposed trust instrument must be approved by the reporting
individual's supervising ethics office.
NOTIFICATION AND FILINGS
Within thirty days after a trust is approved the reporting individual
must file with his supervising ethics office a copy of the trust agree-
ment and a list of the assets which were transferred to the trust.
The reporting official must notify his supervising ethics office
within thirty days after transferring an asset (other than cash) to
an existiDg blind trust, as to the identity and category of value of the
asset.
Within thirty days after dissolution of a trust the reporting official
must notify his supervising ethics office of such dissolution and must
file a list of the assets and their value at the time of dissolution.
When a trustee or an interested party makes any written communi-
cation to one another concerning the trust, a copy of such communi-
cation shall be filed by the person initiating it to the supervising
ethics office of the reporting official within five days of the date of
the communication.
PROHIBITIONS AND ENFORCEMENT
A trustee may not knowingly or negligently disclose information
to an interested party which may not be disclosed; acquire holdings
prohibited by the trust agreement; solicit advice from an interested
party concerning the trust when prohibited by law or the trust agree-
ment; or fail to file any required document.
103
A reporting individual shall not knowingly or negligently solicit
or receive information concerning the holdings or transactions of the
trust which he is not allowed to receive under the Act, and shall not
fail to file any document as required.
The Attorney General is authorized to bring civil action against
persons violating the prohibitions listed above.
EXISTING TRUSTS
Trusts existing before the Ethics in Government Act's passage may
be considered blind trusts if the supervising ethics officer finds that
a good faith effort was made to establish a blind trust; if the trust
instrument is amended, or an agreement is made in writing, to conform
the trust to the statutory requirements, and the trustee meets the
qualifications; and if the trust instrument, list of assets and their
value originally transferred to the trust, and a list of assets transferred
and subsequently sold are filed and made available to the public.
Chapter 10. CAMPAIGN FUNDS AND PRACTICES
Highlight
As to general campaign finance requirements, Members of the House
must abide by the provisions of the Federal Election Campaign Act
concerning required record keeping, reporting, registration, and
organization.
As to the receipt of campaign contributions, ,Members and em-
ployees should note the numerous restrictions under Federal Cam-
paign laws, such as, for example, prohibitions on:
— corporate, labor union, and Government contractor contribu-
tions ;
— contributions from foreign nationals;
— contributions from Federal employees;
— contributions over specified statutory limits;
— cash contributions over $100;
— receiving or soliciting contributions in a Federal building;
— misrepresenting oneself as working on' behalf of a particular
candidate, or circulating anonymous campaign literature;
— failing to report contributions received or expenditures made.
Concerning the use of campaign funds, rules and regulations pro-
vide that:
— campaign funds may not be converted to personal use or used
for official expenses ;
— campaign funds may only be used for bona fide campaign
purposes;
— funds received in testimonials or other fundraisers are to be
treated as campaign funds subject to the above restrictions;
— a Member may generally not use official funds, supplies, or
equipment merely for campaign activity.
Concerning participation by House employees in political cam-
paign activities, Members and employees should note:
— employees of the House are not covered by the "Hatch Act",
and may engage in general partisan campaign activity on their
free time;
— employees of the House are paid from public funds to perform
official congressional duties for a Member, committee or officer,
and are not paid to perform campaign activities on behalf of a
Member or party;
— employees may therefore not engage in campaign activities to
the neglect of their official congressional duties for which they
are compensated. Once an employee fulfills the official duties
required of him, he is free to engage, in campaign activities;
—employees may not make political contributions "directly or
indirectly" to another Federal employee or to a Member of
Congress ;
— Members of Congress are prohibited from soliciting or receiving
n political contributions from their staff as well as other Federal
employees.
(105)
293-587 O - 79 - 8
Chapter 10. CAMPAIGN FUNDS AND PRACTICES
Members of the House of Representatives are under numerous re-
strictions and regulations concerning the use of campaign funds, and
campaign finance procedures in general. The regulations and restric-
tions on campaign financing applicable generally to all candidates for
Federal office derive predominantly from the Federal Election Cam-
paign Act of 1971 and the subsequent amendments to that Act. 1 Under
the provisions of that Act, the Federal Election Commission has been
established as an independent regulatory agency to oversee Federal
campaign procedures and practices regulated by the Federal campaign
laws. 2 The provisions of the Federal Election Campaign Act and the
regulations promulgated under that Act by the Federal Election
Commission should be examined closely by Members of the House
concerning their campaigns for Federal office.
This report will highlight only briefly the major provisions of the
large body of Federal campaign laws relating to requirements of report-
ing, registration and disclosure, and restrictions on campaign contri-
butions. Specific requirements of Federal campaign finance laws or
interpretations of specific provisions, including advisory opinions, may
be requested from the Federal Election Commission. This report will
deal mainly with those provisions not specifically under the authority
of the Federal Election Commission, that is, restrictions in the House
Rules such as those on the use of campaign funds, and other ethical
or conduct issues such as use of congressional staff or official equip-
ment or supplies in a congressional campaign.
As to congressional staff working on campaigns, there are no Federal
statutes, regulations or rules which specifically prohibit employees
of the House of Representatives from engaging in general campaign
activity. The broad prohibition against campaign activity by executive
branch personnel, known as the "Hatch Act", is not applicable to
congressional employees. Thus, apart from certain restrictions in the
area of campaign contributions and solicitations, House employees
may participate in partisan campaign activities. There do, however,
exist broad ethical guidelines which direct that House staff fulfill their
official congressional duties for which they receive compensation from
the Government. Consequently, congressional employees should not
engage in campaign activities to the neglect of their official duties; and
once they have fulfilled their official duties, they are then generally
free to engage in partisan campaign activity.
General Campaign Finance Requirements. Briefly, under the Fed-
eral Election Campaign Act, a Member of the House who is a candi-
date for Federal office must designate a political committee to serve as
his principal campaign committee. 3 Such committee, as is generally
'P.L. 92-225, 86 Stat. 3, Feb. 7, 1972; P.L. 93-443, 88 Stat. 1263, Oct. 15, 1974; P.L. 94-283, May 11, 1976j
» 2 U.S.C. 5 437C-438.
»2 U.S.C. § 432(e); Federal Election Commission Regulations (hereinafter FEC Regs) see. 102.11.
(106)
107
the case for all other political committees, must register with the
Federal Election Commission 4 and be organized and keep records
according to Federal campaign laws. 5 Each candidate to Federal office
must also designate one or more national or State banks as his cam-
paign despositories. 8
Candidates for the House and political committees supporting them
must file periodic, detailed reports, on forms provided by the Federal
Election Commission, to the Clerk of the House as custodian for the
FEC, concerning the receipt of political contributions and the making
of political expenditures. 7 Copies of such statements required to be
filed must also be filed with the Secretary of State, or similar State
officer, of the appropriate State. 8
Restrictions on Receipt of Contributions. Members of and candi-
dates for Congress are prohibited under Federal campaign laws from
receiving political contributions from the treasury funds of a corpora-
tion, labor organization or a national bank. 9 Additionally, contribu-
tions may not be accepted from persons who are Federal government
contractors. 10 Such corporations, labor organizations, membership
organizations or cooperatives may, however, even if holding a govern-
ment contract, establish separate segregated funds, often referred to
as political action committees or PACs, to which voluntary contribu-
tions, not solicited by threats of job discrimination or reprisals or by
dues or assessments required as a condition for employment, are
made. 11 Such PACs may then make political expenditures and con-
tributions, and contributions may be received from them by Members
and candidates for the House, up to contribution limits specified by
Federal law.
Federal law restricts the amount of political contributions which
may be made by, and accepted from, individuals and political com-
mittees. Multi-candidate political committees which are registered
for six months with the FEC, receive contributions from 50 or more
people, and contribute to at least five Federal candidates, may contri-
bute up to $5,000 to a candidate for every primary, election, or run-off
■election in which the candidate is involved (and, may contribute up
to $5,000 to a political committee during one calendar year, and up
to $15,000 to national political party committees). 12 The political
action committees of corporations and labor unions are often multi-
candidate committees, and thus if qualified as described above, con-
tributions of up to $5,000 per election may be lawfully received from
such organizations. If a political committee is not a qualified multi-
candidate committee it may only make contributions of up to $1,000
per election to a candidate. 13 As to contributions from individuals,
Federal law restricts the amount of contributions which may be made
by, or received from, individuals to $1,000 to any candidate or author-
« 2 U.S.C. | 433; FEC Regs Part 102.
• 2 U.S.C. I 432(a)- (d); FEC Regs Part 102.
•2 U.S.C. § 437b; FEC Regs Part 103.
7 2 U.S.C. |§ 434, 436; FEC Regs Parts 104-106.
• 2 U.S.C. | 43»; FEC Regs Part 108.
• 2 U.S.C. } 441b; FEC Regs Part 114.
10 2 U.S.C. | 441c; FEC Regs Part 115.
" 2 U.S.C. | 441b(b)(2); 2 U.S.C. | 441c(b); FEC Regs sections 114.6 and 115.3.
12 2 U.S.C. | 441a(a)(2); FEC Regs section 110.2.
I' 2 U.S.C. |441a(a)(l); FEC Regs section 110.1.
108
ized committee of a candidate for each primary, election or run-off in
which the candidate is involved. Individuals are further limited in
making contributions to $5,000 to other political committees per year,
$20,000 to national political party committees per year, and $25,000
in total political contributions in a calendar year. 14
Political contributions are also specifically prohibited from foreign
nationals not lawfully admitted to the United States for permanent
residence; 15 from public utility holding companies; 16 from persons in
the name of another; 17 and are prohibited in cash in amounts over
$100. 18
Political Contributions from Government Employees. Members of
Congress, candidates for Congress, and Federal employees are specific-
ally prohibited by provisions of Federal criminal law from soliciting
or receiving political contributions from Federal government em-
ployees, including employees of the House of Representatives. 19
Such Federal employees are also prohibited, as discussed later, from
making political contributions to Members of Congress or to other
Federal employees. 20 Although no prosecutions are apparent under
the provision prohibiting employees from making contributions to
Members, a conviction of a Member for receiving political contri-
butions from his staff has been upheld by a Federal court. 21
Members of the House should therefore not receive or be involved
in the solicitation of political contributions, or any money to be used
for political purposes, from Federal employees, particularly from
one's staff. The statute which prohibits such solicitation or receipt
of contributions prohibits such activity "directly or indirectly''.
Thus, political contributions should apparently not be received or
solicited from such employees by a Member's principal campaign
committee or a committee authorized in writing by the Member to
receive contributions on his behalf.
It has been noted in an informal letter from the Department of
Justice that the Department's enforcement policy as of 1974 concern-
ing contributions from Federal employees received by a political
committee "supporting" a Member of Congress is that such receipt
might not be considered a "prosecutable" violation (although ap-
parently a technical violation) of the statute where the contribution
is voluntary and is received by a committee in the normal course
of its operations. 22 The statement in this 1974 letter, which was.
written in response to questions concerning contributions by Senate
employees, was, however, tempered concerning its non-enforcement
position by noting that "the existence of certain kinds of relation-
ships between a Senator and a Federal employee-contributor — such
as an employer-employee relationship — may, in some circumstances,
give rise to an inference of coercion". Thus, a contribution from a
congressional employee to one's employer/Member may be "suspect"
even under this generous enforcement declaration by the Justice
Department in 1974.
"Id.
" 2 U.S.C. § 441e; FEC Regs sec. 110.4(a).
••15 U.S.C. §79(L).
" 2 U.S.C. § 441f; FEC Regs section 110.4(b).
» 2 U.S.C. § 441g; FEC Regs section 110.4(c).
19 18 U.S.C. §602.
20 18 U.S.C. §607.
2i Rrehra v. United States, 196 F. 2d 769 (D.C Cir. 1952), cert. den. 344 U.S. 838 (1952).
22 Letter from Henry E. Peterson, Assistant Attorney General, Criminal Division, by Thomas J. McTier*
nan, Chief of the Fraud Section, United States Department of Justice, August 12, 1974.
109.
In any event it should be noted that the letter from the Justice
Department was an informal statement of enforcement policy in 1974
and thus could be subject to revision by the Department. Further, the
Federal Election Campaign Act has been amended since 1974 to
make distinctions between independent political committees which
merely "support" a Member's candidacy, and those committees which
are specifically authorized in writing by the candidate to accept
contributions or make expenditures on his behalf, including the
candidate's principal campaign committee which the candidate is
now required to name under campaign law. 23 These new statutory
distinctions concerning the independence of a political committee from
a Member or candidate or the connection to or control over a com-
mittee by a candidate, which could bear on the "indirect" nature of a
political contribution for a Member made through, a committee, were
therefore not considered in the 1974 opinion written prior to the statu-
tory amendments. Finally, in upholding the conviction of a Member
of the House for receiving political contributions from a staff employee,
the United States Court of Appeals for the District of Columbia
did not specifically find in its opinion that evidence of "coercion"
or a "shakedown" was a necessary element of the offense to uphold a
conviction under the statute. In fact, although testimony was con-
flicting, the Court cited testimony presented by the Government to
the effect that the contribution by the staff employee was voluntary
and apparently unsolicited. 24 Members should thus be particularly
wary of accepting political contributions from their staff employees,
even if voluntary and unsolicited. Under criminal code reforms pro-
posed in the 95th Congress and passed by the Senate, such voluntary
unsolicited contributions from congressional employees to a Member's
committee would be lawful. However, the criminal code reform has
yet to be enacted into law. 25
There exist legislative statements to indicate that solicitations
which are directed to the public at large, but which unintentionally
reach Federal Government employees who come within the area
solicited, were not intended to constitute a violation of 18 U.S.C.
section 602. 26 This was apparently intended to avoid a violation of
section 602 where a Member or an employee sends out solicitations
to a boxholder list or a general broad list, which happens to include
a Federal employee.
Furthermore, there is legislative history in the form of a resolution
adopted by the House in 1913 to indicate that the prohibition on solici-
tation and receipt of political contributions from Federal employees
was not intended to prohibit and "should not be construed to pro-
hibit one Senator or Member of Congress from soliciting campaign
contributions from another Senator or Member of Congress or from
making such solicitation in the office furnished such Senator or Mem-
ber of Congress in a Government building." 27
Use of Campaign Funds. Although Federal law at 2 U.S.C. § 439a
provides generally that excess campaign funds may be used to defray
M See 2 U.S.C. §§432(e), 434(a)(2), 441a(a)(7\441d(2).
-* Brehm v. United States, supra at 770.
** See S. 1437, 95th Congress, section 1516, S. Rpt. No. 95-605, part 1, at pp. 484-485.
M See 113 Congressional Record 25703, Sept. 11, 1973. debate concerning proposed revision of § 602.
37 "Cannon's Precedents of the House of Representatives," Vol. VI, section 401, pp. 571-573.
110
the expenses of running a Federal office, or for any other lawful pur-
pose, the Rules of the House of Representatives, place more restrictive
regulations on the use of campaign funds by Members of the House.
The Rules of the House require that Members use campaign funds
solely for campaign purposes, and specifically prohibit the use of
campaign funds for personal 28 or official purposes. 29 Campaign funds
also may not be used, under the provisions of House Rule XLVI(4),
for defraying the cost of preparing or printing of any mail material to
be sent in a mass mailing under the Member's frank. Additionally,
the House Rules provide that any proceeds from testimonials or
other fund-raising events are to be treated by Members as campaign
contributions subject to the above restrictions. 30
Non-incumbent candidates for the House of Representatives, since
they are not subject to the House Rules on campaign funds, may
thus use excess campaign funds "for any * * * lawful purpose", as
provided by a statute at 2 U.S.C. 439a. Such purpose may include,
as noted by the Federal Election Commission, personal uses such as
the defraying of personal living expenses while one is a candidate to
Federal office. 31 The diversion and use of such campaign funds for
personal purposes by non-incumbent candidates for Federal office
may, however, result in an additional income tax liability for the
non-incumbent candidate since such funds diverted for personal use
would generally be considered personal "income" to such person. 32
Further tax consequences may arise because of such conversion in
the form of the loss of a tax deduction for contributors to such a
candidate who uses political contributions for other than campaign
purposes. 33 It may be noted that legislation offered in the 95th Con-
gress would have placed statutory prohibitions upon the use of cam-
paign funds for personal purposes by non-incumbent candidates for
Federal office similar to those now placed on incumbent Members of
Congress by House Rules. 34 However, this legislation was not enacted
into law.
No Personal Use. — Members of the House are instructed by House
Rule XLIII(6) to keep campaign funds separate from personal funds;
not to convert campaign funds to personal use except for reimburse-
ments for legitimate, verifiable prior campaign expenses; and not to
expend campaign funds for other than bona fide campaign purposes.
This clause of the Code of Official Conduct of the House Rules was
amended to read in its present form on March 2, 1977, by H. Res. 287,
95th Congress.
As discussed in the House during the debate preceding the adoption
of H. Res. 287, no specific definition of "bona fide campaign purpose"
is provided in the rules, and what would be considered a legitimate, or
bona fide political or campaign expense, would depend on the par-
ticularized facts of a specific situation:
We sought to make no strict definition of political expenses.
What is political is a matter of fact rather than of definition.
We believe that if a Member travels home for a political
» House Role XLIII(6).
« House Rule XLV.
"House RuleXLIII(7).
" See Federal Election Advisory Opinions 1976-17 and 1978-5.
*> I.R.S. Proc. 68-19 (1968); Rev. Rul 74-23 (1973).
83 26 U.S.C. §§ 218, 41, see definition of political contribution.
* S. 926, 95th Congress, passed Senate 8/3/77; H.R. 11315, 95th Congress, reported from House Admin
istration Committee 3/16/78.
Ill
purpose, and it is covered by his volunteer committee out
of political accounts, that this is a political expense.
However, what we have tried to do is to confine expenses
from political accounts or volunteer committee accounts to
expenses that are political. By and large, that definition will
be left up to the Member and to his volunteer committee,
and as it is broadly defined under the election law. 35
No Official Use — The 1977 amendments to the Rules of the House of
Representatives made by H. Res. 287, 95th Congress, specifically
intended to build a "wall between campaign funds and official allow-
ances". 36 Thus, the Rules of the House of Representatives, in addition
to requiring that campaign funds be used only for campaign purposes
and prohibiting the conversion of campaign funds to personal use,
have established a specific prohibition against the maintenance or use
by a Member of an "unofficial office account", that is, the House
Rules prohibit the use of non-appropriated, private funds such as
campaign contributions to defray official expenses of the Member. 37
The recommendations of the House Commission on Administrative
Review, substantially adopted by Congress on March 2, 1977, as
revisions to the House rules on conduct (H. Res. 287, 95th Congress),
set forth reasons for requiring that official expenses of a Member be
paid exclusively from official, appropriated funds:
The Commission strongly believes that private funds
should be used only for politically related purposes. Official
allowances should reflect the necessary cost of official ex-
f)enses. Increasing official allowances ... to eliminate re-
iance on private sources represents a small cost to the
public for the benefits to be derived. To suggest otherwise
would be to accept or condone the continuation of the
present system which, at the very least, allows for the
appearance of impropriety, and, at worst, creates a climate
for potential "influence peddling" through private financing
of the official expense of Members of Congress. 38
As noted earlier in this discussion, no specific definition of those
expenses which would be considered "political" (as opposed to "offi-
cial" for which no campaign funds may be used) was provided in the
House Rules or the recommendations of the House Commission on
Administrative Review. During the floor discussion preceding the
adoption of H. Res. 287, 95th Congress, it was noted on various
occasions that what would be considered a political expense for which
campaign funds could be used, rather than an official expense for
which only appropriated funds could be used, would depend on the
particular facts of a specific situation, that is, "[w]hat is political is a
matter of fact rather than of definition". 39 Examples were noted in
the House debates that a Member's travel to his home district might
be considered a political expense if the purpose of the trip were
campaign related ; 40 and that taking certain individuals out to dinner,
85 Congressional Record, Mar. 2. 1977, H1581 (daily ed.), comments by Representative Frenzel.
38 House Document No. 9.5-73, 9,5th Congress. 1st Session, "Financial Ethics", Communication from the
Chairman, House Commission on Administrative Review, Feb. 14, 1977, p. 18.
37 House Rule XLV.
88 House Doc. 9.5-73, supra at p. 18.
89 Cong. Rec. Mar. 2, 1977, H1581 (daily ed).
40 Cong. Rec. supra at H1581.
112
if such were a political meeting rather than one relating to official
duties, could be reimbursed or paid from campaign accounts. 41
In the final report of the House Select Committee on Ethics of
the 95th Congress, which was authorized to issue advisory opinions and
interpretations of the House Rules amendments adopted by H. Res.
287, 95th Congress, the Select Committee discussed the intent of the
Rule restricting the use of campaign funds, and possible "political"
purposes for which campaign funds might legitimately be used under
the Rule :
The intent of this rule is to restrict the use of campaign
funds to politically-related activities and thus to prohibit
their conversion to personal use or to supplement official
allowances. The rule should not be interpreted to limit the
use of campaign funds strictly to a Member's reelection
campaign. A retiring Member of Congress, for example, may
continue to engage in various political activities which of
course are not campaign-related and also are not in connec-
tion with his official duties.
*******
The Federal Election Commission and the Internal
Revenue Service define political expenditures as a payment
or gift of anything of value made for the purpose of in-
fluencing the selection, nomination, or election of an in-
dividual to public office. However, the FEC and IRS have
interpreted this definition broadly to encompass the tra-
ditional political-related activities of Members of Congress.
Thus, if a Member determines, for example, that advertise-
ments in publications of civic organizations, the mailing
of holiday greetings to constituents, or travel to meetings
with local party officials, would constitute a political ex-
penditure, as so defined, or are otherwise politically-related,
then he may use campaign funds for that purpose. Any such
political expenditures must be fully disclosed in accordance
with the reporting requirements of the FEC Act. 42
Franking. — Although provisions of Federal statutory law provide
that the frankability of mail matter shall be determined by the type
and content of the material to be sent, and that such frankable mate-
rial may be paid for from political contributions, 43 the Rules of the
House of Representatives place an additional restriction on the use of
the frank by House Members for any mass mailings, such as news-
letters or postal patron mail, which are not paid for exclusively from
official funds. 44 Thus, campaign funds may not be used to prepare,
print, or distribute any mass mailing (500 or more substantially identi-
cal pieces of mail) to be made under the franking privilege of a Member
of the House.
The rationale behind the restriction on the use of campaign funds,
or other private funds, for defraying the cost of mass mailings under
41 Cong. Rec. supra at H1589.
42 House Report No. 95-1837, 95th Congress, 2d Session, Final Report of the Select Committee on Ethics,
p. 16.
♦'39TJ.S.C. § 3210(e).
« House Rule XLVI(4).
113
the frank was explained by the House Commission on Administrative
Review :
The Commission believes that since the franking privilege
is reserved for "official materials," it is inappropriate for
franked mass mailings to be printed and prepared with
private or political funds.
* * * * * * *
The Commission believes that it is necessary to make
a clear separation between the public purpose and private
interest in the use of the frank, and, therefore, private funds
should not be used to print "official documents." 45
Testimonials and Fundraisers. — The Rules of the House now provide
that any funds received from testimonial dinners of other fund raising
events are to be treated as campaign contributions (House Rule
XLIII(7)), subject to all the restrictions on campaign funds. Thus,
such proceeds may be used only for bona fide campaign purposes,
rather than for personal, or official office uses. This restriction in its
present form derived from H. Res. 287, 95th Congress, 1st Session.
In an Advisory Opinion issued by the Select Committee on Ethics
in the House, the Committee found that a direct mail solicitation by
a Member of the House or the spouse of a Member constitutes a
"fundraising event" for purposes of House Rule XLIII(7), and thus
proceeds from such a solicitation must be treated as campaign con-
tributions which may not be converted to personal use by the Member.
Finding such, the Select Committee noted that a major purpose of
the revisions of the Code of Official Conduct was to prevent Members
from "cashing in" on their official position in the Congress. 46
The Select Committee on Ethics also found, in Advisory Opinion
No. 11, May 11, 1977, that a Member may not accept proceeds for
his unrestricted personal use from a fundraiser which is conducted
by a group which is independent from the Member.
The Select Committee on Ethics, in its final report, however, noted
certain refinements in its opinions on the use of moneys received from
testimonials or fundraisers for strictly campaign purposes. In that
report, the Committee stated that "a fundraising effort to help a
Member pay medical expenses resulting from a catastrophic illness
of a family member," where the Member was not involved in the fund
raising and the moneys were directly applied to the payment of medi-
cal bills exclusively, would be outside of the prohibition of the Rule
since the intent of the Rule was to prevent Members from using their
official position for personal gain, "but certainly not to disadvantage
the Member more than other individuals living in the community." 47
Additionally, the Select Committee found that a legal defense fund
for a Member who does not have the financial resources to pay the
expenses incurred "in defending a court action arising out of either
a contested election or performance of official duties" may be estab-
lished without violation of House Rule XLIII, clause 7. 48
« H. Doc. 95-73, supra at p. 19.
w Advisory Opinion of the House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 4,
April 6, 1977.
« 7 IT. Rpt. 95-1837, supra at p. 14.
*> Id. at p. 15.
114
The Select Committee noted that the Federal Election Commission
has ruled that excess campaign funds may be expended to pay legal
fees in connection with such actions brought against a Member. Thus,
since such expenditures can be characterized as "campaign-related"
by the FEC, the Select Committee found that creation of a legal
defense fund would not be in violation of Rule XLIII(7).
Use of Excess Campaign Funds. Campaign funds which are in
excess of amounts needed to defray the cost of campaigning are under
the same restrictions as campaign funds in general, discussed in the
preceding section. Thus, although Federal law provides generally
that excess campaign funds may be used to defray the expenses of
running a congressional office or for any other lawful purpose, Mem-
bers of the House, under the provisions of the House Rules, may
generally use excess campaign funds solely for campaign purposes
and may not convert excess campaign funds to personal use, or use
such funds to defray official office expenses. Excess campaign funds
also may not be used for defraying the cost of preparing or printing
any mail material to be sent in a mass mailing under the Member's
frank.
The statutory provision at 2 U.S.C. § 439a by itself would allow,
as ruled by the Federal Election Commission, the personal use of
excess campaign funds, including the defraying of personal living
expenses while one is a candidate for Federal office. The Federal
Election Commission has further ruled that upon the death of a
Member of Congress, the surplus campaign funds held by the late
congressman's principal campaign committee and other authorized
campaign committees may be transferred, under the Federal statute
at 2 U.S.C. § 439a (and absent any Federal or state provisions outside
of the jurisdiction of the Commission which makes such use unlawful),
"to a ward organization, to the surviving members of the Congress-
man's immediate family, to employees on his Congressional or Com-
mittee payrolls and to a variety of charities," as well as to a specific
candidate for office, within the campaign contribution limitations of
applicable Federal or state law. 49 The Commission, however, did not
offer an opinion as to the possible tax consequences of such transfers,
and of course, restrictions of House Rules and applicable ethical
standards must be considered for Members and employees of the
House.
Under the provisions of both the Federal statute at 2 U.S.C. § 439a
and the provisions of House Rules, excess campaign funds may be
placed in a depository, accruing interest, for use in a future political
campaign. It should be noted that in addition to the general reporting
requirements concerning the disposition of campaign funds and the
present balance of bank or savings and loan accounts, 50 interest which
has accrued on campaign funds placed in an interest bearing account
will be subject to taxation as income of the candidate's political com-
mittee. The Select Committee on Ethics stated in its final report that
the House Rules would also not bar the use of excess campaign funds
for making contributions to any charitable organization described
in section 170(c) of the Internal Revenue Code, or to a political party
or another candidate, as permitted by the regulations of the Federal
Election Commission. 61
*> Federal Election Commission Advisory Opinion 1978-94, December 15, 1978.
60 See 2 U.S.C. § 434. PEC Regs section 104.2.
« H. Rept 95-1837, supra at pp. 16-17.
115
Campaign Activities by House Employees; Use of Congressional
Staff on Campaigns. As discussed in chapter 2 of this report, staff
employees of a Member, officer, or of a committee of the House, are
compensated from funds of the United States Treasury for the regular
performance of official duties on behalf of the Member, officer, or a
committee, and are not compensated from public funds for the per-
formance of non-official political campaign activities on behalf of a
Member. Members of Congress may therefore not compensate a staff
employee from public funds merely for the performance of campaign
duties. However, once an employee has completed the official duties
assigned to him for which he is compensated from public funds, the
employee is free to engage in campaign activities on his own free time.
There appear to be no rulings in the House which would prohibit an
employee from engaging in campaign activities while on annual leave
or while on leave without pay status.
As to the standards applicable to the duties of congressional staffers,
although no precise job descriptions are in force for clerk-hire em-
ployees or committee staffers, general ethical standards applicable to
House employees require an employee to "give a full day's labor for a
full day's pay", 52 and to "perform duties commensurate with the com-
pensation he receives." 53 These ethical standards thus indicate that a
congressional staff employee must fulfill his official duties for which
public compensation is received and may therefore not engage in cam-
paign activities on behalf of the Member to the neglect of those duties.
In addition to these ethical standards, a general appropriations
statute requires that appropriated funds be applied solely for their
intended purposes. 54 Since congressional staff employees are paid funds
appropriated from the United States Treasury, they are arguably
compensated for services rendered for public purposes — that is, to
assist Members of Congress in their official legislative and representa-
tional duties, to work on committee business, or to perform other
specified congressional duties. They are not, therefore, compensated
to perform campaign activities, which are not part of a Member's
official duties nor within a committee's official responsibilities. Again,
however, once an employee fulfills his official duties for which he is
compensated from public funds, he is generally free to engage in cam-
paign activities.
It is difficult to precisely define what is required of a Member's staff
employee in order to be considered as having "fulfilled his official duties."
His official duties are not defined by statute or by House Rule, but
they are instead assigned to a staffer by the Member involved. A
further complicating factor is that it is sometimes difficult to totally
separate "campaign" activities from "official" legislative or repre-
sentational duties. As noted by the Supreme Court of the United
States, a Member's "legitimate" and "appropriate" representational
duties might be characterized as "political in nature", and may in-
clude "legitimate errands performed for constituents, the making of
appointments with Government agencies, assistance in securing
Government contracts, preparing so-called 'newsletters' to constitu-
ents, news releases, and speeches delivered outside Congress." 55 Thus,
a distinction needs to be made between a staffer's legitimate official
K Code of Ethics for Government Service, 72 Stat, part II, B 12.
"House Rule XLIII(8).
M31U.S.C. §628.
« United States v. Brewster, 408 U.S. 501, 512 (1972).
116
duties which might arguably be characterized as "political in nature",
and those activities which are merely political "campaign" activities
directed solely at the Member's reelection.
Despite theoretical difficulties which may arise in distinguishing
"official" from "campaign" activities of House staffers, it should be
noted that under the theory of misuse of appropriated funds, false
claims and fraud, various law suits have been filed against Members of
Congress under the False Claims Act 56 provisions for claiming Federal
salaries for staff employees who were allegedly not performing official
congressional duties for the Member in return for their compensation
from public funds. 57 In one of those cases, campaign activities of the
staffer were involved. 58 Although citizens' suits concerning salaries
of congressional employees under the False Claims Act generally
have proved unsuccessful, the Department of Justice, it should be
noted, has obtained a criminal indictment against a former Member of
the House of Representatives charging that the Member defrauded
the United States by placing 11 persons on his congressional payroll
to pay them for operating and staffing various campaign headquarters-
in the former Member's re-election campaign. 59
The House Committee on Standards of Official Conduct has issued
an advisory opinion on the subject of permissible campaign activities-
of staff employees of House Members. That opinion indicates that
campaign activity by staff employees of House Members is permitted*
However, the opinion states that employees are expected to confine
campaign activities to their own free off duty hours, albeit that these
hours may occur during what is regarded as the "conventional" work
da y :
As to the allegation regarding campaign activity by an
individual on the clerk hire rolls of the House it should be
noted that due to the irregular time frame in which Congress
operates, it is unrealistic to impose conventional work
hours and rules on Congressional employees. At some times
these employees may work more than double the usual work
week — at others, some less. These employees are expected to
fulfill the clerical work the Member requires during the
hours he requires and generally are free at other periods.
If during the periods he is free, he voluntarily engages in
campaign activity, there is no bar to this. There will, of
course, be differing views as to whether the spirit of this
principle is violated but this Committee expects Members
of the House to abide by the general proposition. 60
Political Contributions by House Employees. Employees of the
Federal Government are prohibited from making political contri-
butions to a Member of Congress or another Federal employee under
68 31 U.S.C. §231, 232; see requirement in House Administration Regulations for employing Member'
officer or committee to certify the "regular performance of official duties" of staffer to receive salary, see
discussion in Chapter 2 of this report.
57 United States ex rel. Thompson v. Hays, Civil Action Nos. 76-1078. 1132 and 1140, dismissed by the
court for lack of jurisdiction over subject matter because information on which suits were based was in t he
possession of the United States prior to fili'i? of the suits: United States ex rel. Martin-Trigona v. Dosey
Civil Action 76-1164 (D.D.C), dismissed for reasons noted above; United States ex rel. Joseph v. Cannon,
Civil Action No. 77-0452, (D.D.C).
68 See United States ex rel. Joseph v. Cannon, supra.
*• United States v. Clark, Criminal No. 78-207 (D.C.W. Pa. 1978" 1 ; see report on indictment, Washington
Post, September 6, 1978, p. A6.
" House Committee on Standards of Official Conduct, Advisory Opinion No. 2, July 11, 1973.
117
the provisions of a Federal criminal statute. 61 The language of the
statute at 18 U.S.C. § 607, clearly prohibits anyone who is an "officer,
clerk, or other person in the service of the United States, or any
department or agency thereof" from making a political contribution
"directly or indirectly" to any other officer, clerk, person in the
service of the United States or any Member of Congress.
There has been some question surrounding this statutory provision
concerning the propriety of making voluntary contributions by con-
gressional employees to Members of Congress or to the personal
campaign committee of a Member. The confusion surrounding this
statute appears to derive in large part from the enforcement history,
or more precisely the non-enforcement history of this provision. In
the nearly 100 years of the existence of this law, there appear to be
no indictments obtained by the Justice Department under its pro-
visions.
Although there are no reported cases under this statute, the De-
partment of Justice, as well as other authorities on Federal criminal
and campaign laws, have specifically noted in the past that even vol-
untary contributions from congressional employees to Members of
Congress are technical violations of the statute. 62 Additionally, the
Department of Justice has testified in congressional hearings on crim-
inal code reform that contributions by employees to a political com-
mittee of a Member "would seem to be an 'indirect' giving, which is
expressly prohibited by Section 607." 63 Questions have arisen, how-
ever, concerning informal declarations of Justice Department en-
forcement policy which have indicated that the Justice Department
might not consider it a "prosecutable" violation (although apparently
a technical violation) of the law where an employee makes a voluntary
contribution, without coercion or corrupt intent, to a committee sup-
porting a Member of Congress. 84 The statement in this 1974 letter
written m response to a Senator's questions on contributions by Senate
employees was, however, qualified concerning its non-enforcement
position by noting that "the existence of certain kinds of relationships
between a Senator and a Federal employee-contributor — such as an
employer-employee relationship — may, in some circumstances, give
rise to an inference of coercion." 65 Thus, a contribution from a con-
gressional employee to one's employer/Member would be "suspect"
even under this generous enforcement declaration bv the 1974 Justice
Department.
81 IS U.S.C. § 607.
™ftt!i e ni! t?r from Attoniey General James P. McGranery, October 14, 1953, to House Judiciary Subcom-
m i. e Chairman Prank L. Chelf concerning contributions made by staff of Representative Reva Beck
£■««£„' i A - ^"'caHy. Mrs Bosone is guilty under one section, the contributors under another", Con-
nfTK,i$ U arterl y T News Features, 1952, p. 1021; Working Papers of the National Commission on Reform
rl^lf w 1 ™ 1 "? 1 La g s ' V oL A- PR- S1 8-819. see also Final Report, p. 165; Senate Report No. 95-500, 95th
r™£ k '« ■ Session Report of the Committee on Rules and Administration, "Review of Laws Related to
m?£ w , r«™J?*? e y ?J Sohclt e d f!0 "? Senate 0ffi cers and Employees", pp. 5-6: Federal Election Com-
mission. Commissioner Memorandum No. 1434, from William Oldaker, General Counsel, p. 2, August 25,
Government 6 below > concerning contributions by Senate employees as employees of the Federal
■<mh r« S ni mony a by J° h T n C-. K eeney, Deputy Assistant Attorney General, Criminal Division, on S. 1400,
mittPP on ?S & 6 Juo V T c,ar y,C on ] :nlt J ee - Se P l - V' mZ > Hearings p. 6787; see also Report of the Com-
Conlr^ Kt I U in ia!y V Unlt ed States Senate to Accompany S. 1437, 95th Congress, S. Rpt. 95-605, 95th
congress, 1st Session, Criminal Code Reform Act of 1977, pp. 484-485
■Ti P r™n e r^ m ,^!; nr £ E - Peterson, Assistant Attorney General, Criminal Division, by Thomas J. Mc-
liernan. Chief of the Fraud Section, Lnited States Department of Justice, August 12 1974.
118
As noted in an earlier section, the statement offered by the Depart-
ment of Justice in 1974, discussed above, is an informal one, not bind-
ing on the Department, which remains free to change its enforcement
policy at any time in exercising its prosecutorial discretion. 66 Criminal
code reforms passed by the Senate in the 95th Congress would amend
this law to allow voluntary, unsolicited contributions to Members of
Congress 67 which, as noted in the report on the measure, are now pro-
hibited. 68 This legislation, however, has failed to pass the House and
has not been enacted into law.
As outlined earlier, in addition to possible technical violations of law
by an employee when he makes a political contribution to a Member,
the Member may be in violation of another Federal criminal law for
receiving such a contribution from the employee, 69 and a Federal court
has in fact sustained a conviction of a Member for receiving campaign
contributions from his staff. 70
Thus, considering the actual language of 18 U.S.C. § 607, the state-
ments of intent by the legislature during the history of the legislation, 71
and the possible political and publicity factors as well as the legal
matters involved when a Member of Congress receives contributions
from employees, a cautious and prudent course of conduct by an em-
ployee would be to avoid making contributions to authorized political
committees supporting a single, incumbent candidate for Congress, in
addition to not handing over money directly to a Member of Congress.
Although section 607 prohibits the making of political contributions
to incumbent Senators or Representatives, the prohibition does not
extend to state or local political candidates, or to non-incumbent
Federal candidates who are not otherwise Federal Government em-
ployees (although such congressional candidates would apparently
be barred from receiving such contributions under 18 U.S.C. §602).
Additionally, it appears that § 607 would be interpreted to allow an
employee to make a contribution to a political party, or a multi-
candidate political committee such as the Republican or Democratic
Congressional Campaign Committee or the like, so long as contribu-
tions are not "earmarked" to a specific incumbent candidate for Con-
gress. Such "earmarking" of contributions might be considered an
"indirect" contribution to the candidate.
Campaign Activity in a Federal Building. In reelection campaigns
of Members of Congress, a primary consideration is 18 U.S.C. § 603
which prohibits the solicitation or receipt of political contributions
"in any room or building occupied in the discharge of official duties"
by officers or employees of the Government.
As for the solicitation of contributions, although this statute has
thus far not been specifically construed by the courts to prohibit the
solicitation of campaign contributions from a congressional office
directed to the public at large by letter or telephone, such activities
would be barred by other provisions relating to appropriations and
* As to enforcement of desuetndential criminal statutes, see: "Sutherland Statutory Construction," Fourth
Edition by C. Dallas Sands, Volume 2, §§ 34.06, 34.08, 34.09.
•» S. 1437, 95th Congress, section 1516.
« S. Rpt. No. 95-605, part 1, supra at pp. 484-485.
68 18 U.S.C. § 602; see letter from Attorney General James P. McGranery, October 14, 1953, cited at not*
#02.
'«' Brehm v. United States, 196 F.2d 769 (D.C. Cir. 1952), cert. den. 344 U.S. 838 (1952).
" See: 14 Cong. Rec. 622 (1882), remarks by Senator Hoar.
119
official allowances. The criminal statute at § 603 has historically been
construed to prohibit the solicitation of contributions from a Federal
employee while such person is within a Federal building. The focus
of the prohibition, then, has been directed to the location of the
person solicited, rather than the location from which the solicitation
originated. As noted by the Supreme Court in interpreting the fore-
runner of § 603, "the solicitation was in the place where the letter was
received." 72 Under this interpretation, section 603 would arguably
not prohibit solicitations from a congressional office to the public at
large so long as the persons solicited were not in a Federal building.
However, other provisions of the United States Code, as well as
regulations governing certain allowances in the House, specify that
amounts provided from appropriated funds for telephone, mail,
office space, stationery, etc., are to be used for "official" purposes. 73
Thus, these provisions would apparently bar the use or conversion of
such supplies or facilities for campaign purposes, rather than official
congressional purposes. As noted in Chapter 3 of this Manual the use
of official allowances, or supplies or goods secured by such allowances,
for other than official purposes might possibly subject a Member to a
number of legal liabilities concerning false claims, fraud, or conversion.
As for receipt of campaign funds in a congressional office, as noted
above, it appears that section 603 was initially enacted to prohibit
the solicitation or receipt of political contributions from Federal em-
ploj^ees while such employees were within a Federal building. The
original basis of this interpretation is found in the legislative history
and intent of the Pendleton Act, which was the forerunner of the pres-
ent Federal statute. 74 The stated purpose of that Act was to "regulate
and improve the Civil Service of the United States" and to protect
Government employees from "political assessments" described as
"one of the conspicuous evils of our corrupt civil service." 75 The intent
of the specific provision in question was explained by Senator Logan
as "preventing Senators and Representatives and other officers of the
Government from going in [to a Federal building] for the purpose of
annoying the clerks and other persons and asking for contributions." 76
The present statute has undergone no substantive revision since its
initial enactment as part of the Pendleton Act, and its original intent —
that is to prohibit the solicitation or receipt of contributions from
Government employees within a Federal building — has not specifi-
cally been revised by Congress in the legislative history of section 603. 77
However, although the original legislative intent of 18 U.S. C. §603
indicates a narrow application of the prohibition, the language of the
present statute does appear on its face to prohibit the receipt of any
political contribution in a Federal building, regardless of who the
contributor is. Therefore, discretion should be exercised concerning
the acceptance of campaign contributions within a congressional office.
7J United States v. Thayer, 209 U.S. 39, 44 (1908).
78 See discussion of "Official Allowances", Chapter 3 of this report.
» 22 Stat. 403, 407.
75 14 Congressional Record 865.
71 14 Congressional Record 640.
77 See: 35 Stat. 1110, § 119; 62 Stat. 722; House Rept. No. 304 ,80th Congress, 1st Session, p, A51; see also
revisor's note to 18 U.S.C. § 603, 1970 Ed.; 65 Stat. 718; House Rept. No. 462, S2d Congress, 1st Session.
120
Although no official, written opinion is available, authorities on con-
gressional ethics in both the House and Senate have strongly advised
against conducting campaign financing activities from a congressional
office.
It is not unusual, however, and is often unavoidable that unsolicited
campaign contributions will be received through the mail, or a con-
tribution by a supporter will be tendered in person, within a congres-
sional office. When this situation occurs it has been advised that as a
practical matter the person involved accept the contributions only as
a transmittal for subsequent forwarding, as soon as possible, to ap-
propriate campaign personnel outside of the congressional office for
actual receipt and acknowledgment of the contribution. When con-
tributions are offered in person within a congressional office, it has
further been advised to suggest, when practical, that the contribution
be tendered instead to the appropriate campaign committee outside
of the Federal building. 78
List of Prohibited Campaign Activities. Following is a brief listing
of specific statutory prohibitions relating to campaign activities by
an employee or Member of the House. This list may be used to provide
a quick reference to activities which should raise so-called "red flags"
as far as Federal statutory law is concerned.
An employee or Member of the House may not:
(1) Promise to use support or influence to obtain Federal employ-
ment for anyone in return for a political contribution (18 U.S.C. § 211).
(2) Deprive, attempt to deprive, or threaten to deprive anyone of
employment or any other benefit, provided for or made possible by an
Act of Congress appropriating relief funds, because of that person's
political affiliation (18 U.S.C. § 246, as added by P.L. 94-453).
(3) Make or offer to make an expenditure to any person either to
vote or withhold one's vote or to vote for or against any candidate in
a Federal election (18 U.S.C. § 597).
(4) Solicit, accept, or receive an expenditure in consideration of his
vote or the withholding of his vote m a Federal election (18 U.S.C.
§ 597 )-
(5) Use any appropriation by Congress for work relief, relief, or for
increasing employment, or exercise any authority conferred by any
appropriations act for the purpose of interfering with, restraining, or
coercing any individual in the exercise of his right to vote (18 U.S.C.
§ 598 >-
(6) If a candidate, directly or indirectly, promise or pledge the
appointment of any person to any public or private position or em-
ployment, for the purpose of procuring support in one's candidacy
(18 U.S.C. §599).
(7) Promise employment or any other benefit provided for or made
possible by any Act of Congress as reward for political activity or
support (18 U.S.C. §600);
n See S. 926, 95th Congress, as passed the Senate which would have amended § 603 to specifically provide
that no violation occurs when contributions received in a congressional office are promptly transferred to
a campaign account.
121
(8) Cause or attempt to cause anyone to make a political contri-
bution by means of denying or threatening to deny any governmental
employment or benefitprovided for or made possible, in whole or in
part, by any act of Congress (18 U.S.C. § 601, as amended by
P.L. 94-453).
(9) Solicit or receive political contributions from any "person
receiving any salary or compensation or services from money derived
from the Treasury of the United States" (18 U.S.C. § 602).
(10) Solicit or receive political contributions in a Federal building
(18 U.S.C. §603).
(11) Solicit or receive political contributions from persons known
to be entitled to or to be receiving relief payments under any act of
Congress (18 U.S.C. § 604).
(12) Furnish, disclose, or receive for political purposes the names
of persons receiving relief payments under any act of Congress (18
U.S.C. § 605).
(13) Intimidate any "officer or employee" mentioned in 18 U.S.C.
602 to secure political contributions (18 U.S.C. § 606).
(14) Make a political contribution to any Member of Congress,
Federal officer or employee (18 U.S.C. § 607).
(15) Knowingly accept a contribution in excess of limitations under
Federal law of $1,000 to a candidate from any person, or $5,000 to a
candidate from multicandidate committees (2 U.S.C. § 441a(a), added
by P.L. 94-283).
(16) Accept or receive any political contribution from the organi-
zational or treasury funds of a national bank, corporation, or labor
organization (2 U.S.C. §441b).
(17) Knowingly solicit contributions from Government contractors
(2 U.S.C. §441c).
(18) Make an expenditure for any general public political adver-
tising which anonymously advocates the election or defeat of a clearly
identified candidate (2 U.S.C. §441d).
(19) Solicit, accept, or receive a contribution from a foreign national
(2 U.S.C. §441e).
(20) Knowingly accept a contribution made by one person in the
name of another person (2 U.S.C. § 44 If).
(21) Fraudulently misrepresent oneself as speaking or acting on
behalf of a candidate (2 U.S.C. § 44 lh).
(22) Solicit funds by a mailing under the frank (2 U.S.C. § 439b).
(23) To the extent that an individual may make political contri-
butions or expenditures as discussed above, the individual may not:
(a) Make a cash contribution in excess of $100 (2 U.S.C.
§441g);
(b) Make contributions in excess of $1,000 per election to any
candidate, $5,000 per calendar year to political committees and
45-937 O - 79
122
$20,000 to national party committees, or make contributions
aggregating over $25,000 per calendar year (2 U.S.C. §441a(a));
(c) Make a contribution in the name of another (2 U.S.C.
§441f);
(d) Make contributions or expenditures in excess of $100 other
than by contribution to a committee or candidate, without filing a
report with the Federal Election Commission (2 U.S.C. § 434(e)).
Appendix
text of selected rules, regulations, opinions, and statutes
relating to conduct standards
1. Rules of the House of Representatives
Rule XLIII
CODE OF OFFICIAL CONDUCT
There is hereby established by and for the House of Representatives
the following code of conduct, to by known as, the "Code of Official
Conduct":
1. A Member, officer, or employee of the House of Representatives
shall conduct himself at all times in a manner which shall reflect
creditably on the House of Representatives.
2. A Member, officer, or employee of the House of Representatives
shall adhere to the spirit and the letter of the Rules of the House of
Representatives and to the rules of duly constituted committees
thereof.
3. A Member, officer, or employee of the House of Representatives
shall receive no compensation nor shall he permit any compensation
to accrue to his beneficial interest from any source, the receipt of which
would occur by virtue of influence improperly exerted from his position
in the Congress.
4. A Member, officer, or employee of the House of Representatives
shall not accept gifts (other than personal hospitality of an individual
or with a fair market value of $35 or less) in any calendar year ag-
gregating $100 or more in value, directly or indirectly, from any person
(other than from a relative of his) having a direct interest in legislation
before the Congress or who is a foreign national (or agent of a foreign
national). Any person registered under the Federal Regulation of
Lobbying Act of 1946 (or any successor statute), any officer or director
of such registered person, and any person retained by such registered
person for the purpose of influencing legislation before the Congress
shall be deemed to have a direct interest in legislation before the
Congress.
5. A Member, officer, or employee of the House of Representatives
shall accept no honorarium for a speech, writing for publication, or
other similar activity, from any person, organization, or corporation
in excess of the usual and customary value for such services.
6. A Member of the House of Representatives shall keep his cam-
paign funds separate from his personal funds. He shall convert no
campaign funds to personal use in excess of reimbursement for legiti-
mate and verifiable prior campaign expenditures and he shall expend
no funds from his campaign account not attributable to bona fide
campaign purposes.
7. A Member of the House of Representatives shall treat as cam-
paign contributions all proceeds from testimonial dinners or other
fund raising events.
(123)
124
8. A Member of the House of Representatives shall retain no one
from his clerk hire allowance who does not perform duties commensu-
rate with the compensation he receives.
9. A Member, officer, or employee of the House of Representatives
shall not discharge or refuse to lure any individual, or otherwise dis-
criminate against any individual with respect to compensation, terms,
conditions, or privileges of employment, oecause of such individual's
race, color, religion, sex, or national origin.
10. A Member of the House of Representatives who has been con-
victed by a court of record for the commission of a crime for which a
sentence of two or more years' imprisonment may be imposed should
refrain from participation in the business of each committee of which
he is a member and should refrain from voting on any question at a
meeting of the House, or of the Committee of the Whole House,
unless or until judicial or executive proceedings result in reinstatement
of the presumption of his innocence or until he is reelected to the
House after the date of such conviction.
11. A Member of the House of Representatives shall not authorize
or otherwise allow a non-House individual, group, or organization to
use the words "Congress of the United States", "House of Representa-
tives", or "Official Business", or any combination of words thereof,
on any letterhead or envelope.
As used in this Code of Official Conduct of the House of Represent-
atives — (a) the terms "Member" and "Member of the House of Rep-
resentatives" include the Resident Commissioner from Puerto Rico
and each Delegate to the House ; and (b) the term "officer or employee
of the House of Representatives" means any individual whose com-
pensation is disbursed by the Clerk of the House of Representatives.
For the purposes of clause 4 of this Code of Official Conduct —
(1) The term "relative" means, with respect to any Member,
officer, or employee of the House of Representatives, an indi-
vidual who is related as father, mother, son, daughter, brother,
sister, uncle, aunt, first cousin, nephew, niece, husband, wife,
grandfather, grandmother, grandson, granddaughter, father-in-
law, mother-in-law, son-in-law, daughter-in-law, brother-in-law,
sister-in-law, stepfather, stepmother, stepson, stepdaughter, step-
brother, stepsister, half brother, half sister, or who is the grand-
father or grandmother of the spouse of the person reporting.
(2) The term "foreign national" means an individual who is not
a citizen of the United States and who is not lawfully admitted
for permanent residence.
Rule XLV*
PROHIBITION OF UNOFFICIAL OFFICE ACCOUNTS
1. On or after January 3, 1978, no Member may maintain or have
maintained for his use an unofficial office account.
2. After the date of adoption of this rule, no funds may be paid into
any unofficial office account.
3. For purposes of this rule —
(a) the term "unofficial office account" means an account or
repository into which funds are received for the purpose of de-
•Tbls rule was adopted by the House on March 2, 1977 (H. Eea> 287. 95th Cong.).
125
fraying otherwise unreimbursed expenses allowable under section
162(a) of the Internal Revenue Code of 1954 as ordinary and
necessary in the operation of a congressional office, and includes
any newsletter fund referred to in section 527(g) of the Internal
Revenue Code of 1954; and
(b) the term "Member" means any Member of, Delegate to, or
Resident Commissioner in, the House of Representatives.
Rule XLVI*
LIMITATIONS ON THE USE OF THE FRANK
1. Any franked mail which is mailed by a Member under section
3210(d) of title 39, United States Code, shall be mailed at the equiva-
lent rate of postage which assures that such mail will be sent by the
most economical means practicable.
2. After December 31, 1977, the total number of pieces of mail which
may be mailed as franked mail under section 3210(d) of title 39,
United States Code, during any calendar year by a Member entitled to
mail franked mail under this subsection may not exceed an amount
equal to six multiplied by the number of addresses to which such mail
may be delivered, in accordance with paragraph (4) of section 3210
(d) of title 39, United States Code, in the area from which such Mem-
ber was elected. Any mail matter which relates solely to a notice of
appearance or a scheduled itinerary of a Member in the area from
which such Member was elected shall not count against the limitation
set forth in the preceding sentence.
3. Any Member entitled to mail franked mail under section 3210(d)
of title 39, United States Code, shall, before making any such mailing,
submit a sample or description of the mail matter involved to the
House Commission on Congressional Mailing Standards for an ad-
visory opinion as to whether such proposed mailing is in compliance
with the provisions of such section.
4. Any mass mailing which otherwise is frankable by a Member
under the provisions of section 3210(e) of title 39, United States Code,
shall not be frankable unless the cost of preparing and printing such
mass mailing is defrayed exclusively from funds made available in
any appropriations Act.
5. In the case of any Representative in the House of Representa-
tives, other than a Representative at Large, who is a candidate for any
statewide public office, any mass mailing shall not be frankable under
section 3210 of title 39, United States Code, when the same is delivered
to any address which is not located in the area constituting the
congressional district from which any such individual was elected.
6. In the case of any Member, any mass mailing shall not be frank-
able under section 3210 of title 39, United States Code, when the same
is mailed less than sixty days immediately before the date of any pri-
mary or general election (whether regular, special, or runoff) in which
such Member is a candidate for public office.
7. For purposes of this rule, the term "Member" means any Member
of the House of Representatives, a Delegate to the House of Repre-
sentatives, or the Resident Commissioner in the House of Representa-
tives.
•This rule was adopted by the House on March 2, 1977 (H. Ken. 287. 98th Cong.).
126
Rule XLVII
LIMITATIONS ON OUTSIDE EARNED INCOME
1. (a) Except as provided by paragraph (b), no Member may, in
any calendar year beginning after December 31, 1978, have outside
earned income attributable to such calendar year which is in excess of
15 per centum of the aggregate salary as a Member paid to the Member
during such calendar year.
(b) In the case of any individual who becomes a Member during any
calendar year beginning after December 31, 1978, such Member
may not have outside earned income attributable to the portion of
that calendar year which occurs after such individual becomes a
Member which is in excess of 15 per centum of the aggregate salary
as a Member paid to the Member during such calendar year.
2. No Member may, in any calendar year beginning after De-
cember 31, 1978, accept any honorarium of more than $1,000 in value.
3. For the purposes of this rule —
(a) The term "Member" means any Member of the House of
Representatives, a Delegate to the House of Representatives,
or the Resident Commissioner in the House of Representatives.
(b) The term "honorarium" means a payment of money or
any thing of value to a Member for an appearance, speech, or
article, by the Member; but there shall not be taken into account
for purposes of this paragraph any actual and necessary travel
expenses incurred by the Member to the extent that such ex-
penses are paid or reimbursed by any other person, and the
amount otherwise determined shall be reduced by the amount
of any such expenses to the extent that they are not paid or
reimbursed.
(c) The term "travel expenses" means, with respect to a Mem-
ber, the cost of transportation, and the cost of lodging and meals
while away from his residence or the greater Washington, District
of Columbia, metropolitan area.
(d) The term "outside earned income" means, with respect to
a Member, wages, salaries, professional fees, honorariums, and
other amounts (other than copyright royalties) received or to be
received as compensation for personal services actually rendered
but does not include —
(1) the salary of such Member as a Member;
(2) any compensation derived by such Member for personal
services actually rendered prior to the effective date of this rule
or becoming such a Member, whichever occurs later;
(3) any amount paid by, or on behalf of, a Member to a tax-
qualified pension, profit-sharing, or stock bonus plan and received
by such Member from such a plan; and
(4) in the case of a Member engaged in a trade or business in
which the Member or his family holds a controlling interest and
in which both personal services and capital are income-producing
factors, any amount received by such Member so long as the
personal services actually rendered by the Member in the trade
or business do not generate a significant amount of income.
Outside earned income shall be determined without regard to any
community property law.
127
Rule VIII
DUTIES OP THE MEMBERS
1. Every Member shall be present within the Hall of the House
during its sittings, unless excused or necessarily prevented ; and shall
vote on each question put, unless he has a direct personal or pecuniary
interest in the event of such question.
2. Regulations of the House Committee on Standards of Official
Conduct: Regulations for the Acceptance of Decorations and
Gifts, Including Travel or Expenses for Travel, by Members,
Officers, or Employees of the House of Representatives From
Foreign Governments
1. AUTHORITY
The Committee on Standards of Official Conduct is authorized to
issue regulations on this subject by 5 U.S.C. §§ 7342(g), 7342(a)(6),
as amended by P.L. 95-105, commonly known as the Foreign Gifts
and Decorations Act.
2. purpose
The purpose of these regulations is to establish standards for the
acceptance and disclosure of decorations, gifts or more than minimal
value, and gifts of travel or expenses for travel taking place entirely
outside the United States tendered by foreign governments to Mem-
bers, officers, and employees of the House of Representatives.
3. GENERAL STANDARDS
(a) The United States Constitution (Article I, Section 9, clause 8)
prohibits a Federal official from accepting gifts of any kind whatever
from a foreign government without the consent of the Congress.
(b) The Foreign Gifts and Decorations Act (5 U.S.C. 7342) prohibits
an officer or employee of the Government from requesting or other-
wise encouraging the tender of a gift or decoration from a foreign
government, and prohibits the acceptance of such gifts other than in
accordance with the provisions of that Act as implemented for Mem-
bers, officers, and employees of the House by these regulations.
(c) Rule XLIII, clause 4, of the Rules of the House of Representa-
tives prohibits a Member, officer, or employee of the House from
accepting gifts (other than personal hospitality of an individual or
gifts with a fair market value of $35 or less) in any calendar year
aggregating over $100 from a foreign national not acting as a repre-
sentative of a foreign government. Food, lodging, transportation, and
entertainment provided on an official basis by a foreign government
to Members of the House of Representatives are not subject to the
provisions of House Rule XLIII, clause 4, as such matters are deemed
controlled by Constitutional and statutory prohibitions.
4. DEFINITIONS
As used in this section and sections 2, 3, 5 and 6 of these regulations:
(a) "Member, officer, or employee of the House of Representatives"
includes the spouse of such individual (unless such individual and
spouse are separated) or a dependent of such individual (as denned
injsection 152 of the Internal Revenue Code) ;
128
(b) "foreign government" means —
(i) any unit of foreign, governmental authority, including any
foreign municipal, local, State, and national government;
.:' (ii) any international or multinational organization whose
membership is composed of any unit of foreign government de-
scribed in subparagraph (i) ; and
(iii) any agent or representative of any such unit or such or-
ganization, while acting as such;
' (c) "decoration" means an order, device, medal, badge, insignia,
emblem, or award tendered by, or received from, a foreign government;
and
r (d) "gift" means a tangible or intangible present (other than a
decoration) tendered by, or received from, a foreign government.
5. CONSENT OF CONGRESS FOR THE ACCEPTANCE OF DECORATIONS
The Congress has consented (5 USC 7342(d)) to the accepting,
retaining, and wearing by a Member, officer, or employee of the House
of Representatives of a decoration tendered in recognition of active
field service in time of combat operations or awarded for other out-
standing or unusually meritorious performance, subject to the approval
of the Committee on Standards of Official Conduct.
(a) Decorations of minimal intrinsic value. — Decorations presented to
Members, officers, or employees of the House tendered by or received
from a foreign government may be accepted by such Member, officer,
or employee where the intrinsic value of the decoration is of minimal
value, without prior approval of the Committee on Standards of
Official Conduct. Decorations of minimal intrinsic value are denned as
those having a retail value in the United States of $100 or less.
(■■ (b) Decorations of more than minimal intrinsic value. — Unless accept-
ance is specifically approved by the Committee on Standards of
Official Conduct, decorations of more than minimal value, if not
promptly returned, are deemed to have been accepted on behalf of
the United States and shall become the property of the United States.
Within 60 days after acceptance of such a decoration, the decoration
must be turned over to the Clerk of the House of Representatives for
disposal; or, with the approval of the Committee on Standards of
Official Conduct, deposited with the Committee for official use. At
the time such decoration is turned over to the Clerk by a Member,
officer, or employee, such individual must file a disclosure statement
concerning such decoration with the Committee, detailing information
as provided in section 7 of these regulations.
6. CONSENT OF CONGRESS FOR THE ACCEPTANCE OF GIFTS
Congress has consented to the acceptance of certain gifts, or gifts
under particular circumstances, from foreign governments by officers
or employees of the Government, including Members, officers, and
employees of the House:
(a) Gifts of minimal value. — Members, officers, and employees of
the House may accept gifts of minimal value from foreign govern-
ments tendered and received as a souvenir or mark of courtesy.
Gifts of minimal value are defined as those having a retail value in the
United States of $100 or less.
(b) Gifts of more than minimal value where refusal may cause offense
or embarrassment. — A Member, officer, or employee may accept tan-
129
foible gifts of more than minimal value when refusal would be deemed
ikely to cause offense or embarrassment or otherwise adversely affect
United States foreign relations. However, any such tangible gift
received and not promptly returned is deemed to have been accepted
on behalf of the United States, and upon acceptance becomes property
of the United States. Within 60 days after accepting such a gift, the
gift must be turned over to the Clerk of the House of Representatives
for disposal, or, with the approval of the Committee on Standards of
Official Conduct, deposited with the Committee for official use. At
the time such gift is turned over to the Clerk by a Member, officer,
or employee, such individual must file a disclosure statement concern-
ing such gift with the Committee, detailing information as provided
in section 7(a) of these regulations. Intangible gifts of more than
minimal value may only be accepted in accordance with section. 6(c)
and (e) of these regulations.
(c) Education scholarship or medical treatment — Members, officers,
or employees of the House may accept a gift of more than minimal
value from a foreign government when the gift is in the nature
of an educational scholarship or medical treatment.
(d) Foreign educational or cultural exchange. — Acceptance of assist-
ance from a foreign government for participation in foreign exchange
or visitors programs by Federal officers or employees is consented to
by Congress in certain instances outlined in 22 U.S.C. 2458a, the
Mutual Educational and Cultural Exchange Act. Assistance or.grants
received under that act are not considered "gifts" under these regula-
tions.
(e) Travel or expenses for travel outside of the United States. — A
Member, officer, or employee of the House may accept gifts of travel
or expenses for travel taking place entirely outside of the United States
offered by a foreign government • when such travel or expenses for
travel relate directly to the official duties of the Member, officer, or
employee. Gifts of travel or expenses for travel include food, lodging,
transportation and entertainment relating .to the official duties of
the Member, officer, or employee. This provision allows a Member,
officer, or employee to take advantage of opportunities such as certain
onsite inspection or fact findings while in a foreign country. A spouse
or dependent of a Member, officer, or employee of the House may
accept such travel or expenses for travel when accompanying the
Member, officer, or employee Of the House. Such travel or expenses
for travel may not be accepted merely for the personal benefit,
pleasure, enjoyment or financial enrichment of the individual or
individuals involved. The acceptance of any suoh travel or expenses
for travel shall be reported within 30 days after acceptance to the
Committee on Standards of Official Conduct, providing information
required in section 7(b) of these regulations. For the purposes of these
regulations, travel or expenses for travel are deemed accepted upon
departure from the donor country.
7. REPORTS AND DISCLOSURE.
Any gift provided to a .spouse or dependent should be considered
to be a gift provided to the Member, officer, or employee and therefore
must be disclosed by such Member, officer, or employee.
For the purposes of these regulations, any decoration presented by
a foreign government to the spouse or a dependent of a Member,
130
officer, or employee of the House is considered to be presented to the
Member, officer, or employee when it is apparent the decoration would
not have been offered but for the recipient's relation to the Member,
officer, or employee, and therefore must be disclosed by such Member,
officer, or employee.
An appraisal of tangible gifts or decorations, if necessary, may be
obtained through the Clerk of the House of Representatives.
(a) Tangible gifts and decorations. — At the time of depositing a
tangible gift or decoration of more than minimal value accepted by a
Member, officer, or employee pursuant to section 5(b) or 6(b) of these
regulations, the Member, officer, or employee shall report to the Com-
mittee the following information :
(i) the name and position of the reporting individual and the
recipient;
(ii) a brief description of the gift or decoration and the cir-
cumstances justifying acceptance;
(iii) the estimated value in the United States at the time of
acceptance ;
(iv) the date of acceptance of the gift or decoration ;
(v) the identity, if known, of the foreign government and the
name and position of the individual who presented the gift or
decoration;
(vi) disposition or current location of the gift or decoration.
(b) Other gifts.- — Within 30 days after acceptance of gifts of travel
pursuant to section 6(e) of these regulations, the Member, officer, or
employee shall report to the Committee the following information:
(i) the name and position of the reporting individual ;
(ii) a brief description of the gift and the circumstances justi-
fying acceptance ; and
(iii) the identity, if known, of the foreign government and the
name and position of the individual who presented the gift.
8. PUBLIC INSPECTION
Reports filed under these regulations as promulgated under 5
U.S.C. 7342 shall be maintained by the Committee on Standards of
Official Conduct and made available for public inspection at reasonable
hours. Not later than January 31, 1979, and January 31 of each suc-
ceeding year, the Committee on Standards of Official Conduct will
compile a listing of all statements filed during the preceding year and
will transmit such listing to the Secretaiy of State for publication in
the Federal Register.
Reports filed with the Committee under these regulations will be
maintained for public inspection for a period of 7 years following
transmittal to the Secretary of State.
3. Advisory Opinions of the House Committee on Standards of
Official Conduct
A. Advisory Opinion No. 1, Issued January 26, 1970
(On the Role of a Member of the House of Representatives in Com-
municating With Executive and Independent Federal Agencies*)! i
•Subsequent leirislatlon, reflations or rules may affect part or all of this advisory
opinion (see 5 U.S.C. sec. 557(d) relating to prohibited ez parte communications to
administrative agencies).
131
REASON FOR ISSUANCE
A number of requests have come to the Committee for its advice
in connection with actions a Member of Congress may properly take
in discharging his representative function with respect to communica-
tions on constituent matters. This advisory opinion is written to
provide some guidelines in this area in the hope they will be of as-
sistance to Members.
BACKGROUND
The first Article in our Bill of Rights provides that "Congress shall
make no law . . . abridging the . . . right of the people ... to
petition the Government for a redress of grievances." The exercise of
this Right involves not only petition by groups of citizens with com-
mon objectives, but increasingly by individuals with problems or
complaints involving their personal relationships with the Federal
Government. As the population has grown and as the Government has
enlarged in scope and complexity, an increasing number of citizens
find it more difficult to obtain redress by direct communication with
administrative agencies. As a result, the individual turns increasingly
to his most proximate connection with his Government, his represen-
tative in the Congress, as evidenced by the fact that congressional
offices devote more time to constituent requests than to any other
single duty.
The reasons individuals sometimes fail to find satisfaction from their
petitions are varied. At the extremes, some grievances are simply
imaginary rather than real, and some with merit are denied for lack
of thorough administrative consideration.
Sheer numbers impose requirements to standardize responses. Even
if mechanical systems function properly and timely, the stereotyped
responses they produce suggest indifference. At best, responses to
grievances in form letters or by other automated means leave much to
be desired.
Another factor which may lead to petitioner dissatisfaction is the
occasional failure of legislative language, or the administrative inter-
pretation of it, to cover adequately all the merits the legislation in-
tended. Specific cases arising under these conditions test the legislation
and provide a valuable oversight disclosure to the Congress.
Further, because of the complexity of our vast federal structure,
often a citizen simply does not know the appropriate office to petition.
For these, or similar reasons, it is logical and proper that the peti-
tioner seek the assistance of his Congressman for an early and equitable
resolution of his problem.
REPRESENTATIONS
This Committee is of the opinion that a Member of the House of
Representatives, either on his own initiative or at the request of a
petitioner, may properly communicate with an Executive or Inde-
pendent Agency on any matter to:
request information or a status report;
urge prompt consideration;
132
arrange for interviews or appointments;
express judgment;
call for reconsideration of an administrative response which
he believes is not supported by established law, Federal Regula-
tion or legislative intent;
perform any other service of a similar nature in this area com-
patible with the criteria hereinafter expressed in this Advisory
Opinion.
PRINCIPLES TO BE OBSERVED
The overall public interest, naturally, is primary to any individual
matter and should be so considered. There are also other self-evident
standards of official conduct which Members should uphold with
regard to these communications. The Committee believes the follow-
ing to be basic:
1. A Member's responsibility in this area is to all his constituents
equally and should be pursued with diligence irrespective of political
or other considerations.
2. Direct or implied suggestion of either favoritism or reprisal in
advance of, or subsequent to, action taken by the agency contacted
is unwarranted abuse of the representative role.
3. A Member should make every effort to assure that representations
made in his name by any staff employee conform to his instruction.
CLEAR LIMITATIONS
Attention is invited to United States Code, Title 18, Sec. 203(a)
which states in part: "Whoever . . . directly or indirectly receives
or agrees to receive, or asks, demands, solicits, or seeks, any com-
pensation for any services rendered or to be rendered either by himself
or another
(1) at a time when he is a Member of Congress . . .; or
(2) at a time when he is an officer or employee of the United
States in the . . . legislative . . . branch of the government . . .
in relation to any proceeding, application, request for a ruling or
other determination, contract, claim, controversy, charge, accusation,
arrest, or other particular matter in which the United States is a
party or has a direct and substantial interest, before any department,
agency, court-martial, officer, or any civil, military, or naval
commission . . .
Shall be fined not more than $10,000 or imprisoned for not more
than two years or both; and shall be incapable of holding any office
of honor, trust, or profit under the United States."
The Committee emphasizes that it is not herein interpreting this
statute but notes that the law does refer to any compensation, directly
or indirectly, for services by himself or another. In this connection,
the Committee suggests the need for caution to prevent the accrual
to a Member of any compensation for any such services which may be
performed by a law firm in which the Member retains a residual
mterest.
It should be noted that the above statute applies to officers and
employees of the House of Representatives as well as to Members.
133
B. Advisory Opinion No. 2, Issued July 11, 1973
(On the Subject of a Member's Clerk Hire)
REASON FOR ISSUANCE
A number of requests have come to the Committee for advice on
specific situations which, to some degree, involve consideration of
whether monies appropriated for Members' clerk hire are being
properly utilized.
A summary of the responses to these requests forms the basis for
this Advisory Opinion which, it is hoped, will provide some guidelines
and assistance to all Members.
BACKGROUND
The Committee requested the Congressional Research Servirp to
examine in depth the full scope of the laws and the legislative iiibtory
surrounding Members' clerk hire. The search produced little in the
way of specific parameters in either case law or congressional intent,
concluding that ". . . no definitive definition was found, . . .". It
is out of this absence of other guidance the Committee feels constrained
to express its views.
Clerk-hire allowance for Representatives was initiated' in 1893
(27 Stat. 757). The law providing it spoke of providing clerical assist-
ance to a Representative "in the discharge of his official and repre-
sentative duties . . .". The same phraseology is used today in each
Legislative Appropriations bill and by the Clerk of the House in his
testimony before the Subcommittee on Legislative Appropriations.
An exact definition of "official and representative duties" was not
foimd in the extensive materials researched. Remarks concerning
various bills, however, usually refer to "clerical service" or terms of
similar import, thus implying a consistent perception of the term as
payment for personal services.
SUMMARY OPINION
This Committee is of the opinion that the funds appropriated for
Members' clerk-hire should result only in payment for personal
services of individuals, in accordance with the law relating to the
employment of relatives, employed on a regular basis, in places as
provided by law, for the purpose of performing the duties a Member
requires in carrying out his representational functions.
The Committee emphasizes that this opinion in no way seeks to
encourage the establishment of uniform job descriptions or imposition
of any rigid work standards on a Member's clerical staff. It does sug-
gest, however, that it is improper to levy, as a condition of employ-
ment, any responsibility on any clerk to incur personal expenditures
for the primaiy benefit of the Member or of the Member's congres-
sional office operations, such as subscriptions to publications, or pur-
chase of services, goods or products intended for other than the clerk's
own personal use.
The opinion clearly would prohibit any Member from retaining
any person from his clerk hire allowance under either an express or
134
tacit agreement that the salary to be paid him is in lieu of any present
or future indebtedness of the Member, any portion of which may be
allocable to goods, products, printing costs, campaign obligations, or
any other non-representational service.
In a related regard, the Committee feels a statement it made earlier,
in responding to a complaint, may be of interest. It states: "As to the
allegation regarding campaign activity by an individual on the clerk-
hire rolls of the House, it should be noted that, due to the irregular
time frames in which the Congress operates, it is unrealistic to impose
conventional work hours and rules on congressional employees. At
some times, these employees may work more than double the usual
work week — at others, some less. Thus employees are expected to
fulfill the clerical work the Member requires during the hours he
requires and generally are free at other periods. If, during the periods
he is free, he voluntarily engages in campaign activity, there is no
bar to this. There will, of course, be differing views as to whether the
spirit of this principle is violated, but this Committee expects Mem-
bers of the House to abide by the general proposition."
C. Advisory Opinion No. 3, Issued June 26, 1974
(On the Subject of Foreign Travel by Members and Employees of the
House of Representatives at the Expense of Foreign Governments*)
REASON FOR ISSUANCE
The Committee has received a number of requests from Members
and employees of the House for guidance and advice regarding accept-
ance of trips to foreign countries, the expenses of which are borne by
the host country or some agent or instrumentality of it.
The Committee is advised that similar inquiries recently have been
put to the Department of State with respect to other Federal
employees.
In order to provide widest possible dissemination of views expressed
in response to the requests, and to coordinate with statements likely
to be forthcoming from other areas of the Federal government in this
regard, this general advisory opinion is respectfully offered.
BACKGROUND
The United States Constitution, at Article I, Section 9, Clause 8,
holds that: "No Title of Nobility shall be granted by the United
States: And no Person holding any Office of Profit or Trust under
them, shall without the Consent of the Congress, accept of any present,
Emolument, Office, or Title, of any kind whatever, from any King,
Prince, or foreign State."
This provision, described as stemming from a "just jealousy of
foreign influence of every sort," is extremely broad as to whom it
covers, as well as to the "presents" or "emoluments" it prohibits —
speaking of the latter as of any kind whatever. [Emphasis provided.]
It is narrow only in the sense that the framers, aware that social or
diplomatic protocols could compel some less than absolute observance
of a prohibition on the receipt or exchange of gifts, provided for specific
exceptions with "the consent of the Congress."
♦Subsequent legislation, regulations or rules may affect part or all of this advisory
opinion. (See 5 U.S.C. sec. 7342 as amended by P.L.. 95-105, and the regulations of the
House Committee on Standards of Official Conduct on foreign gifts and travel, Issued
January 19, 1978.)
135
Congress dealt from time "to time with these exceptions through
public and private bills addressed to specific situations, and dealt
generally, commencing in 1881, with the overall question of manage-
ment of foreign gifts.
In 1966 Congress passed the latest and the. existing Public Law
89-673, "an Act to grant the consent of Congress to the acceptance of
certain gifts and decorations from foreign governments." That law is
presently codified at title 5, United States Code, section 7342, a copy
of which is attached.
The law is quite explicit in virtually all particulars, save whether
the expense of a trip paid for by a foreign government is a ". . . pres-
ent or thing, other than a decoration, tendered by or received from a
foreign government; ..."
It is on this point that this Opinion lies.
BASIS OF AUTHORITY FOR OPINION
Since this matter impinges equally on all Federal employees, the
Committee sought advice from the Comptroller General as legal
advisor to the Congress, and from the Secretary of State as the imple-
menting authority over 5 U.S.C. 7342.
Copies of their official responses are attached to this Opinion.
SUMMARY OPINION
It is the opinion of this Committee, on its own initiative and with
the advice of the Comptroller General and the Assistant Secretary of
State, that acceptance of travel or living expenses in specie or in kind
by a Member or employee of the House of Representatives from any
foreign government, official agent or representative thereof is not
consented to in 5 U.S.C. 7342, and is, therefore, prohibited. This
prohibition applies also to the family and household of Members and
employees of the House of Representatives.
D. Advisory Opinion No. 4, Issued May 14, 1975
(On the Propriety of Accepting Certain Nonpaid Transportation*)
reason for issuance
The Committee has been requested in writing to express an opinion
on the propriety of Members and staff of the U.S. House of Represen-
tatives accepting nonpaid transportation provided under a number of
circumstances. In order that all may be on notice, the response to that
request is made in this Committee Advisory Opinion.
BACKGROUND
It is necessary and desirable that Members and employees of the
U.S. House of Representatives, being public officials, maintain maxi-
mum contact with the public at large to provide information on the
work of the House and to gain citizen input into the legislative process.
•Subsequent legislation, regulations or rules may affect part or all of this advisory
opinion. (See House Rule XLIH(4) as amended by H. Res. 287. 95th Congress, and the
advisory opinions of the Select Committee on Ethics, Advisory Opinions Nos. 2, 3, 6-10. )
136
To accomplish this, considerable travel is required. Under some
circumstances, such travel may be appropriately provided by other
than commercial means. Conversely, in some circumstances nonpaid
transportation offers should be declined. It is the intent of this Ad-
visory Opinion to address both situations.
The distinction turns on the purpose of the transportation. At
times, it will be clear that there is a single identifiable purpose. At
other times there may be more than one purpose involved. The Com-
mittee stresses that the opinions hereafter stated deal with the prin-
cipal purpose for taking the trip, such purpose to be fairly determined
by the person involved, before acceptance of any non-paid
transportation., »-.•* ■■>■.
NONPAID TRANSPORTATION OFFERS TO BE DECLINED
If the principal purpose of the trip is political campaign activity,
and the host carrier is one who would be prohibited by law from making
a campaign contribution, such nonpaid transportation would amount
to a political contribution in kind, and should not be accepted.
If the trip is principally for non-campaign purposes, and the person
involved were to request the host carrier to schedule transportation
expressly for the convenience of the congressional passenger, such
request could be interpreted as abuse of one's public position and
should be avoided.
NONPAID TRANSPORTATION OFFERS WHICH MAT BE ACCEPTED
If the purpose of the trip is principally representational or even
personal, and if the host carrier's purpose in scheduling the transporta-
tion is solely for the general benefit of the host, and the transportation
is furnished on a space-available basis with no additional costs incurred
in providing the accommodation, it would not be improper to accept
such transportation.
If the purpose of the transportation is to enable the congressional
passenger, in his role as a public official, to be present at an event for
the general benefit of an audience, the accommodation should be
construed as accruing to the benefit of the audience — not the pas-
senger — and it would not be improper to accept such transportation.
The above principle can be similarly applied to situations in which
a congressional passenger is transported in connection with the receipt
of an honorarium. Under such circumstances, the transportation may
be accepted in lieu of monetary reimbursement for travel to which
the passenger would otherwise be entitled.
Congressional officials, like other public officials and private per-
sons, are on occasion invited as guests on scheduled airlines' inaugural
flights. Specific authority to provide such non-paid transportation
is contained in 14 CFR 223.8 and 399.34. Assuming that the condi-
tions of these sections are strictly met, the Committee finds that there
would be nothing improper in the acceptance of such inaugural flights.
(Note: but see now Advisory Opinion No. 3, issued by the Select
Committee on Ethics in the House after revision of the Code of
Official Conduct in the House, which reached a different conclusion
with respect to inaugural flights. The Select Committee opinion
supersedes Advisory Opinion No. 4 of the Committee on Standards
of Official Conduct).
137
4. Advisory Opinions of the Select Committee on Ethics
95th Congress
Advisory Opinion No. 1
SUBJECT
Effective date of House Rule XLVI, clause 4, prohibiting use of pri-
vate funds to pay for the cost of preparing and printing mass mailings.
BACKGROUND
House Rule XLVI, clause 4, as adopted by the House on March 2,
1977, provides as follows :
Any mass mailing which otherwise is f rankable by a Member
under the provisions of section 3210(e) of Title 39, -U.S. Code,
shall not be frankable unless the cost of preparing and printing
such mass mailing is defrayed exclusively from funds made avail-
able in any appropriations Act.
The Commission on Administrative Review, in its report on Finan-
cial Ethics (H. Doc. 95-73, February 14, 1977, p. 19) recommended
that this restriction on mass mailings take effect January 1, 1978. How-
ever, the provision as contained in Title IV of H. Res. 287 inadver-
tently omitted reference to an effective date. Consequently, during
House consideration of H. Res. 287 on March 2, 1977, a colloquy be-
tween Mr. Obey and Mr. Frenzel affirmed that the Commission on
Administrative Review had intended that clause 4 of Rule XLVI take
effect on January 1, 1978 (see Congressional Record, March 2, 1977, p.
H1622) , and that this was the intent of H. Res. 287.
REASON FOR ISSUANCE
Clause 4 of House Rule XLVI is silent as to an effective date, and
thus may be deemed to have taken effect upon adoption, notwithstand-
ing legislative history to the contrary. In order to clarify the situation
and to assure Members that they may continue to use private funds to
prepare and print mass mailings sent under the frank until Janu-
ary 1, 1978, the Select Committee issues this advisory opinion.
OPINION
Members may continue to use private funds to prepare and print
mass mailings sent under the frank until January 1, 1978.
Advisory Opinion No. 2
SUBJECT
Applicability of House Rule XLIII, clause 4, to reimbursement or
payment of necessary expenses associated with a conference, meeting,
or other similar event in which a Member, officer, or employee of the
House participates.
45-937 O - 79 - 10
138
REASON FOR ISSUANCE
Members have raised a number of questions concerning the defini-
tion and application of the gifts provisions as set forth in House Rule
XLIII, clause 4. An advisory opinion has been requested as to whether
the reimbursement or receipt of expenses connected with events in
which a Member, officer, or employee participates constitutes a gift.
BACKGROUND
House Rule XLIII, clause 4, establishes, in effect, that Members,
officers,, or employees of the House shall not accept gifts in any calen-
dar year aggregating $100 or more in value, directly or indirectly,
from any individual, organization, or corporation with a direct interest
in legislation before the Congress, or from a foreign national.
In most cases, an individual's expenses for a meeting or conference,
including transportation, food, and lodging, would exceed the aggre-
gate figure of $100. Additionally, many sponsoring organizations,
domestic or foreign, would have an interest in legislation before the
Congress. However, necessary expenses should not be considered to be
a "gift" to a participating individual who renders personal services
sufficient to constitute "equal consideration" for the expenses provided
by the sponsoring organization. Conversely, it should be noted that
the services rendered must be more than perfunctory in nature to con-
stitute equal consideration for the expenses involved. For example,
addressing an audience at an event or engaging in discussion seminars
would be considered substantial participation sufficient to constitute
"equal consideration," while simply visiting a specific site or location
as part of a "fact-finding tour" would probably not be viewed as "equal
consideration" for expenses paid by a sponsoring organization.
A similar philosophy of exempting expenses for participation in an
event is recognized in clause 3 of House Rule XLVII, which excludes
travel, lodging, and meals from calculation of the honorarium paid
for a speech or appearance.
A separate question surrounds the reimbursement or payment of
similar expenses for the spouse of a Member, officer, or employee. If
a sponsoring organization pays the spouse's expenses to attend an event
in which the Member participates, would those' expenses constitute a
gift to the Member under clause 4 of Rule XLIII ? Rule XLIII does
not specifically address this question. But as a matter of precedent,
Federal Election Commission regulations exclude payment of expenses
for a spouse as a portion of the honorarium received by a Member,
officer, or employee. As a matter of policy, the ability of the spouse to
accompany a Member to such events has many positive benefits. If
House Rules are interpreted so as to prevent reimbursement of a
spouse's travel, food, and lodging expenses, the incentive for Members
to participate in meaningful programs will be diminished.
SUMMARY OPINION
A Member, officer, or employee of the House (and the individual's
spouse or another family member) may be paid or reimbursed for
transportation, food, ana lodging expenses when such expenses are
directly associated with a conference, meeting, or similar event in
which the Member, officer, or employee substantially participates. Such
139
reimbursements or payments aggregating $250 or more from one source
would be disclosed in accordance with the provisions of section 102(2)
(C) or the Ethics in Government Act (PL 95-521).
Advisory Opinion No. 8
subject
Applicability of House Rule XLIII, clause 4, to acceptance of free
transportation provided by air carriers on inaugural flights.
REASON FOR ISSUANCE
The Select Committee has been requested to issue an advisory
opinion on the propriety of Members, officers, or employees of the
House of Representatives accepting free transportation provided by
air carriers on inaugural flights.
BACKGROUND
Commercial air carriers are authorized, under federal regulations
(18 CFR 223.8 and 399.38) and with the approval of the Civil Aero-
nautics Board, to provide free transportation on "inaugural flights"
to invited guests when a new route or new equipment is introduced.
Traditionally, the air carriers invite Members and employees of the
House of Representatives, as well as officials of the Executive Branch,
on such inugural flights.
The applicable House Rule in this situation is Rule XLIII, clause
4, which provides, in effect, that a Member, officer, or employee of
the House of Representatives shall not accept gifts in any calendar
year aggregating $100 or more in value, directly or indirectly, from
any party with a direct interest in legislation before the Congress, or
from a foreign national.
The air carriers are subject to federal regulation, and thus are
deemed to have a direct interest in legislation before the Congress.
The question to be determined is whether an inaugural flight con-
stitutes a gift.
In the case of inaugural flights, the Member, officer, or employee of
the House does not appear to render any services of equal considera-
tion to the value of the flight, and therefore an inaugural flight would
appear to constitute a gift to the Member, officer, or employee. If the
value of the transportation provided on an inaugural flight exceeds
$100, and the Committee assumes that such would be the case in every
instance, acceptance of such a gift would be prohibited under Rule
XLIII, clause 4.
The Committee recognizes that the definition of the term "gift"
for purposes of Rule XLIII, clause 4, might not include some situa-
tion where a trip or event is primarily intended for educational pur-
poses and is directly related to a Member's or officer's or employee's
official duties. However, the Committee finds that inaugural flights,
140
as traditionally defined, do not have sufficient educational value to
exclude them from the definition of a gift for purposes of the intent
of Rule XLIII, clause 4.
SUMMARY OPINION
Acceptance of free transportation provided by air carriers on in-
augural flights is prohibited under House Rule XLIII, clause 4.
Advisory Opinion No. 4
SUBJECT
Under House Rules, may a Member of the House or the spouse of a
Member solicit cash gifts of less than $100 for personal use through
a direct mass mailing ?
REASON FOR ISSUANCE
A Member of the House has requested an advisory opinion as to
whether his proposal to solicit gifts of less than $100 for personal use
would be in violation of House Rule XLIII.
BACKGROUND
Rule XLIII, clause 4, prohibits acceptance of gifts aggregating
over $100 from "persons" having a direct interest in legislation before
the Congress. Since the proposal would solicit only gifts of less than
$100, it would not be in violation of clause 4.
However, Rule XLIII, clause 7, appears to have direct application
to the proposed plan to solicit gifts. Before March 3, 1977, Rule
XLIII, clause 7, read as follows :
A Member of the House of Representatives shall treat as cam-
paign contributions all proceeds from testimonial dinners or other
fund-raising events if the sponsors of such affairs do not give clear
notice in advance to the donors or participants that the proceeds
are intended for other purposes.
This provision was designed to deal with situations in which donations
were given to Members under the mistaken notion that they were to
be used for campaign purposes when, in fact, they were treated as per-
sonal gifts. Hence, language was adopted which specified that unless
advance notice was given, proceeds from fund-raising events could not
be converted to personal use.
The House Commission on Administrative Review recommended
that proceeds from testimonial dinners and other fund-raising events
should not be allowed to be converted to personal use under any cir-
cumstances. Effective March 3, 1977, H. Res. 287 amended clause 7 to
read simply :
A Member of the House of Representatives shall treat as cam-
paign contributions all proceeds from testimonial dinners or other
fund-raising events.
141
In a technical sense, then, the propriety of the proposal turns on the
interpretation of a "fund-raising event." There was no legislative his-
tory defining the term fund-raising event when Rule XLIII was
adopted in 1968.
But in view of the widespread use of mass mailings to raise funds
(direct mail solicitation has become a principal fund-raising tech-
nique since 1968), it would appear that the proposal under considera-
tion constitutes a fund-raising event. In the age of computerized mass
mailings, it is unnecessary for people to gather together in a common
place on a particular date to constitute a "fund-raising event."
Additionally, Rule XLIII, clause 2, would appear to have appli-
cability in this case. The provision states :
A Member, officer, or employee of the House of Represent-
atives shall adhere to the spirit and letter of the Rules of the
House of Representatives and to the rules of duly constituted
committees thereof.
A major thrust of the provisions contained in the new House Rules
adopted March 2, 1977, was to severely limit the potential for Members
to "cash in" on their positions of influence for personal gain. There-
fore, a limitation on outside earned income was proposed and adopted.
A proposal to abolish unofficial office accounts was offered and adopted.
A proposal to prohibit the conversion of political funds to personal use
was adopted. And the proposal discussed above to treat all proceeds
from fund-raising events as campaign contributions was also adopted.
Therefore, it would appear that a proposal to solicit funds for per-
sonal use would be contrary to the "spirit" of the House Rules adopted
pursuant to H. Res. 287.
The final question concerns the propriety of a spouse raising funds
through mass mail solicitation for the benefit of the Member. While
the Select Committee recognizes the basic independence of the spouse,
the spouse under these circumstances would be acting essentially on
behalf of the Member. Thus, the Member would be conducting indi-
rectly the very activities he would be prohibited from engaging in
directly.
Consequently, the mass mail solicitation of funds by a spouse for a
Member's use also appears to violate the "spirit" of House Rules.
SUMMARY OPINION
A direct mail solicitation by a Member of the House or the spouse of
a Member constitutes a "fund-raising event" for purposes of House
Rule XLIII, clause 7. Proceeds from a "fund-raising event" for a
Member of the House must be treated as "campaign contributions" and
cannot be converted to personal use by the Member. Therefore, any
such attempt to raise funds for personal use through a mass mailing
would be in violation of House Rule XLIII, clause 7. Additionally,
any such activity would appear to be contrary to the spirit of House
Rules and, therefore, in violation of House Rule XLIII, clause 2.
142
Advisory Opinion No. 5
SUBJECT
Use of campaign funds to pav for official expenses incurred prior to
March 3, 1977.
REASON FOR ISSUANCE
The Select Committee has received several inquiries regarding the
use of campaign funds to pay for official expenses incurred prior to
the effective date of House Rule XLIII, clause 6, and Rule XLV.
BACKGROUND AND DISCUSSION
House Rule XLIII, clause 6, as amended on March 2, 1977, restricts
the use of campaign funds to bona fide campaign purposes. House Rule
XLV, also adopted on March 2, 1977, prohibits the acceptance of
private contributions to defray ordinary and necessary expenses in-
curred in the operation of a congressional office. Both Rules changes be-
came effective upon adoption.
Some Members committed excess campaign funds to pay for official
expenses incurred on or before March 3, 1977, the effective date of the
new Rules, but have not actually expended their campaign funds to
pay those debts. In such cases, the campaign funds were contributed
prior to the Rules changes and the expenses were incurred before the
adoption of the new Rules.
The amendment to Rule XLIII, clause 6, and new Rule XLV were
not intended to have an ex post facto effect. Therefore, the Select Com-
mittee finds that use of campaign funds contributed prior to the Rules
changes to pay for official expenses incurred prior to March 3 is per-
missible under the Rules.
House Rule XLV clearly prohibits Members who have incurred of-
ficial expenses either before or after March 3 from raising private
funds subsequent to the effective date of the Rules course, to pay for
campaign or political expenses incurred before or after March 3.
SUMMARY OPINION
Members who incurred official expenses prior to March 3, 1977, the
effective date of new Rule XLIII, clause 6, and Rule XLV, may use
campaign funds available on or before that date to pay those official
expenses. The payment of obligations incurred prior to the effective
date of the new Rules would be limited to the liability accrued up to
March 3. Campaign funds raised after March 3, 1977 may not be used
to pay for official expenses incurred before or after the effective date
of the new Rules.
143
Advisory Opinion No. 6
SUBJECT
Acceptance of in-kind services for official purposes.
REASON FOR ISSUANCE
The Select Committee has been asked whether House Rule XLV,
which prohibits unofficial office accounts, extends to private contribu-
tions or in-kind services for official purposes.
BACKGROUND AND DISCUSSION
House Rule XLV provides that no funds may be paid into any un-
official office account subsequent to March 2, 1977, and that such ac-
counts must be abolished by January 3, 1978. The definition of an
unofficial office account included in the new Rule focuses on the most
common form, i.e., a privately subsidized account used to supplement
official allowances.
The legislative history of Rule XLV refers to an unofficial office
account as a fund, repository, or process whereby funds are received
or expended. The reasons for adopting new Rule XLV, as presented
in the Financial Ethics report of the Commission on Administrative
Review (H. Doc, 95-73, February 14, 1977), emphasize that eliminat-
ing private support of the public's business should be the primary
objective of a new Rule :
The Commission strongly believes that private funds should
be used only for politically-related purposes. Official allow-
ances should reflect the necessary cost of official expenses. . . .
To suggest otherwise would be to accept or condone the con-
tinuation of the present system [of unofficial office accounts]
which, at the very least, allows for the appearance of impro-
priety, and, at worst, creates a climate for potential "influence
peddling" through private financing of the official expenses
of Members of Congress.
Although it is clear that acceptance of monetary contributions to
sustain such accounts was perceived as conduct to be prohibited by the
new Rule, questions have been raised concerning the application of
Rule XLV to acceptance of certain in-kind services (e.g., office sup-
plies and equipment, district office space, etc.) and whether such items
will be treated differently than monetary contributions for purposes
of the Rule XLV prohibition.
The Select Committee finds that no distinction can be made be-
tween in-kind and monetary contributions. Whether the private sup-
port alluded to in the Commission's report is in the form of a mone-
tary contribution or in the form of an in-kind service is not relevant
in view of the intended prohibition against the private financing of
official business. Moreover, it can hardly be argued that donation of
in-kind services is any less an iniusiqn <}| Juriygte support for official
business than is the donation of money.
144
At least two precedents for treating in-kind services as monetary
contributions are found in regulations promulgated by the Federal
Election Commission (FEC) and the Internal Revenue Service
(IRS). Those regulations require the inclusion of in-kind donations
as contributions to unofficial office accounts, thus confirming the Se-
lect Committee's understanding that money and in-kind contributions
should be treated the same.
The FEC defines an "office account" (unofficial office account) as
"an account established for the purpose of supporting the activities of
a Federal or State officeholder which contains excess campaign funds
. . ." (11 CFR 113.1b). Such excess campaign funds include contribu-
tions of "anything of value.'' Therefore, according to the FEC defi-
nition, unofficial office accounts may encompass in-kind services or re-
sources.
Similarly, the IRS considers the donation of in-kind resources as a
"contribution,'' applying the criterion of "anything of value.'' The
IRS treats the contribution of in-kind services or resources used for
official purposes as personal income to the Member, just as it treats
contributions to unofficial office accounts.
In sum, the Select Committee finds that for purposes of applying
Rule XLV, no logical distinction can be drawn between the private
contribution of in-kind services and the private contribution of money,
and that both perpetuate the very kind of unofficial office accounts and
practices that are prohibited by House Rule XLV.
Equally clear, however, is that various in-kind services and func-
tions provided by federal, state and local government agencies do not
fall in the same category as private donations of money or in-kind
services. Thus, the provision of office space or rooms for constituent
meetings, etc., by a state or local government would not be prohibited
by application of this Rule. Of course, the occasional use of privately
owned meeting space where no other appropriate public accommoda-
tions are reasonably available for meeting constituents does not fall
within the proscriptions of the new Rule.
Additionally, application of the Rule would not prohibit a Member
from continued participation with various educational intern, fellow-
ship or volunteer programs. Members have long recognized that there
is an inherent educational and professional benefit in interns, fellows,
and volunteers viewing first hand the Legislative Branch of govern-
ment, and that there are compelling public policy considerations for
encouraging such programs. There is nothing in the legislative history
that suggests an intent to discontinue these programs, nor has there
surfaced any evidence of abuses resulting from the infusion of private
money into public business causing conflict of interest or other situa-
tions intended by Congress to be prohibited by the new Rule. The
Select Committee believes these programs are of primary benefit to
the persons involved and notes that interns, fellows, and volunteers
are not on the payroll of the House, nor are they considered to be
employees of the House of Representatives. Therefore, this interpre-
tation of Rule XLV does not apply to intern programs, provided the
internships are primarily for educational purposes and do not give
undue advantage to special interest groups or others with a direct in-
terest in legislation.
145
However, it is clear that a Member would be violating the intent
and the spirit of House Rule XLV if he attempted to supplement
his official allowance by raising, receiving, or disbursing contributions
to hire or support interns in his office. Therefore, it follows that a
Member and his staff are prohibited from personally raising, receiv-
ing, or disbursing contributions used to support an educational intern,
fellowship, or volunteer program. This holding represents the only
effective method for restricting the potential to collect and maintain,
directly or indirectly, unofficial funds for supplementing staff assist-
ance and the officially provided clerk-hire allowance.
SUMMARY OPINION
For purposes of House Rule XLV, the private contribution of
in-kind services for official purposes is prohibited. However, Rule
XLV does not apply to services provided by federal, state and local
government agencies or to the occasional use of privately-owned meet-
ing space where no public accommodations are reasonably available
for meeting with constituents. Nor does Rule XLV apply to interns or
volunteers in a Member's office, based on the understanding that such
intern programs are primarily of educational benefit to the intern and
do not give undue advantage to special interest groups. However,
Members and their staffs may not personally raise, receive or disburse
any private contributions for intern programs associated with their
offices.
, Advisory Opinion No. 7
SUBJECT
Definition of a gift for purposes of House Rule XLIII, clause 4.
reason for issuance
The Select Committee has received a number of inquiries concern-
ing the definition of the word "gift" and application of the provisions
of House Rule XLIII, clause 4 pertaining to acceptance of gifts.
BACKGROUND AND DISCUSSION
House Rule XLIII, clause 4 was amended in March 1977, to pro-
vide that "a Member, officer, or employee of the House shall not accept
gifts in any calendar year aggregating $100 or more in value, directly
or indirectly, from any party with a direct interest in legislation be-
fore the Congress, or from a foreign national." Specifically exempted
from this provision are: (1) gifts from relatives; (2) gifts valued at
$35 or less; and (3) gifts of personal hospitality of an individual.
The Commission on Administrative Review, in its report on Finan-
cial Ethics (H. Doc. 95-73, February 14, 1977) recommending the
Rules changes that were enacted by the House, specified that bequests
146
and other forms of inheritance should not be considered gifts for
purposes of the new Rule, and explained personal hospitality to mean
"hospitality extended for a non-business purpose by an individual,
not a corporation or organization, on property or facilities owned
by that individual or his family." Additionally, it is understood that
loans and campaign contributions are not considered to be gifts.
Other than the exemptions specified in the Rule and the legislative
history, there is no precise definition of what constitutes a gift for
purposes of Rule XLIII, clause 4. The House recognized the likeli-
hood that Members, officers and employees would need guidance on
the definition of terms used in the new House Rules, and therefore
passed H. Res. 383 which authorized the Select Committee to issue
advisory opinions providing such guidance and interpretation re-
specting the application of the Rules.
The Select Committee begins with the proposition that the basic
legal definition of a gift should be used in applying the provisions of
Rule XLIII, clause 4, as follows :
A payment, subscription, advance, forbearance, rendering,
or deposit of money, services, or anything of value, including
food, lodging, transportation, or entertainment, and reim-
bursement for other than necessary expenses, unless consid-
eration of equal or greater value is received by the donor.
This definition is implicit, for example, in the Select Committee's Ad-
visory Opinion #2, which states that necessary expenses provided
a Member in connection with an event in which he "substantially par-
ticipates," i.e., renders consideration of equal value, do not constitute
a gift.
The Select Committee finds that there are certain categories of gifts
that were never intended to be covered under the Rule XLIII, clause
4 limitations on acceptance of gifts. These are items that do not pre-
sent potential conflicts of interest or are related to a Member's official
duties. For these reasons, Rule XLIII, clause 4 is not applicable to
the following categories of gifts :
Food, lodging, transportation, and entertainment provided on
an official basis by federal, state, and local governments and po-
litical subdivisions thereof. Members, officers, and employees are
frequently invited to various functions paid for or sponsored by
such government agencies. It was not the intent of the gifts limi-
tation to prohibit Members, officers and employees from partici-
pating in such events. Even if the individual is not fully par-
ticipating, but is simply present, for example, at a groundbreak-
ing ceremony or a banquet honoring newly-elected officials, it
would serve no purpose to preclude such activities.
Food, lodging, transportation, and entertainment provided by
a foreign government within a foreign country. The Foreign
Gifts and Decorations Act was amended by PL 95-105 to give
the consent of Congress to acceptance of gifts of travel or ex-
penses for travel provided by a foreign government for travel
taking place entirely outside the United States. Any such gifts
of travel expenses must be disclosed to the Committee on Stand-
ards of Official Conduct within thirty days after departure from
147
the donor country. Since such gifts from a foreign government
are subject to these statutory requirements, they are exempted
from the prohibitions of Rule XLIII.
Communications to a Member's offices in Washington, D.C. and
his district, including subscriptions to newspapers, magazines,
and periodicals. Members are traditionally provided free sub-
scriptions to weekly news magazines, newspapers, interest group
journals, and other publications which are useful as information
sources or reference tools in the conduct of the Member's official
duties. In many cases, these publications are provided by organi-
zations with a direct interest in legislation and could exceed $100
in value in a calendar year, particularly if postage is added (e.g.,
local newspapers). It would be inappropriate and contrary to the
public interest to prohibit Members from receiving these materials
and might impinge on the rights of citizens to communicate with
their Representative. The Select Committee emphasizes that this
finding applies primarily to free subscriptions to publications, and
not to individual items of considerable value, such as a set of en-
cyclopedias or rare books.
Bona fide awards presented in recognition of public service and
available to the general public. A Alember, officer, or employee
should be permitted to accept an award valued at more than $100
from an organization so long as the award is not contrived for
one special occasion and is available to the general public.
A suitable memento of a function held in honor of the Member,
officer, or employee. A Member, officer, or employee should be per-
mitted to accept a suitable memento of reasonable value. How-
ever, the Committee emphasizes that a "suitable memento" would
not include items such as cash, a television set, or automobile.
Consumable products provided by home-state businesses to a
Member's office but which are primarily intended for consump-
tion by persons other than the Member and his staff. Members
have traditionally received gifts of consumable items (e.g.. cig-
arettes, peanuts, etc.) from businesses in their home states. These
consumable products are usually passed on to constituents and
other visitors to the office and are therefore not considered by the
Committee to be gifts to the Member or his staff. This applies only
to gifts ,of consumable items, and only when such items are con-
sumed primarily by persons other than the Member and his staff.
Food and beverages consumed at banquets, receptions, or simi-
lar events. This exemption does not apply to dinners for small
groups at restaurants or other such private affairs.
SUMMARY OPINION
For purposes of Rule XLIII, clause 4, a gift is defined as follows :
A payment, subscription, advance, forbearance, rendering,
or deposit of money, services, or anything of value, including
food, lodging, transportation, or entertainment, and reim-
bursement for other than necessary expenses, unless consid-
eration of equal or greater value is received by the donor.
The Select Committee finds, based on the language of new Rule
XLIII, clause 4, the Rule's legislative history, the absence of conflict
148
of interest issues, and/or public policy considerations, that the follow-
ing items are not gifts for purposes of Rule XLIII, clause 4:
(1) Bequests and other forms of inheritance;
(2) Loans made in a commercially reasonable manner (includ-
ing requirements that the loan be repaid and that a reasonable
rate of interest be paid) ;
(3) Political contributions as defined by the Federal Election
Commission and otherwise reported as required by law;
(4) Food, lodging, transportation, and entertainment provided
on an official basis by federal, state, and local governments or po-
litical subdivisions thereof;
(5) Food, lodging, transportation, and entertainment provided
by a foreign government within a foreign country.
(6) Communications to a Member's offices in Washington and
his district, including subscriptions to newspapers, magazines,
and other periodicals.
(7) Bona fide awards presented in recognition of public service
and available to the general public ;
(8) Suitable mementos of a function honoring the Member,
officer, or employee.
(9) Consumable products provided by home-state businesses to
a Member's office that are primarily intended for consumption by
persons other than the Member and his staff.
(10) Food and beverages consumed at banquets, receptions, or
similar events.
Advisory Opinion No. 8
SUBJECT
Applicability of House Rule XLIII, clause 4 to acceptance of neces-
sary expenses paid by an organization in connection with a fact-finding
event which is directly related to the official duties of a Member, of-
ficer, or employee.
REASON FOR ISSUANCE
The Select Committee has received numerous inquiries concerning
whether a Member, officer, or employee may accept payment or re-
imbursement for necessary expenses from an organization sponsoring
a fact-finding event.
BACKGROUND
Members, officers, and employees of the House of Representatives
are often invited by independent foundations, corporations, unions
and other non-governmental organizations, both foreign and domes-
tic, to attend a "fact-finding"' event which is intended for educational
purposes directly related to their official duties.
For example, an oil company may sponsor an inspection tour of its
offshore oil drilling platform,' or a lumber company may arrange a
demonstration of new logging methods in a remote area. Similarly, a
foreign foundation may invite Members and employees to attend an
149
educational program designed to promote better understanding and
improve U.S. relations with that country.
The applicable House Rule regarding fact-finding events is Rule
XLIII, clause 4, which provides that a Member, officer or employee
shall not accept gifts 1 in any calendar year aggregating $100 or more
in value, directly or indirectly, from any party with a direct interest
in legislation before the Congress, or from a foreign national. In many
instances, the sponsoring organization of a fact-finding tour or similar
activity would be deemed to have a direct interest in legislation before
the Congress, and the travel expenses provided by the organization
would alone exceed $100.
DISCUSSION
Although there has been some criticism regarding abuses of "fact-
finding tours"' in the past, the Select Committee finds that it would be
contrary to the public interest and the intent of Rule XLIII to pro-
hibit Members, officers, and employees from attending fact-finding
events or activities which have a legitimate purpose directly related
to the official duties of the Congress. The Committee also notes the
precedent in current law (22 U.S.C. 2451-2) which allows federal em-
ployees to accept travel expenses paid by foreign governments in con-
nection with a trip which is for an educational or cultural purpose and
is so certified by the State Department.
Therefore, the Select Committee holds that necessar-y expenses paid
by an organization sponsoring a fact-finding event are exempted from
the limitations of Rule XLIII, clause 4, provided that the fact-finding
event or activity is directly related to the official duties of the Member,
officer, or employee. Any such reimbursement or payment of travel ex?
penses aggregating over $250 in value from one source would be sub-
ject to disclosure under the requirements of the Ethics in Government
Act (PL 95-521). This public disclosure will guard against the poten-
tial abuse of converting this kind of activity from an official business
purpose to that of personal pleasure or entertainment. Gifts of that
nature exceeding $100 in value were clearly intended to be prohibited
by Rule XLIII, clause 4.
This exemption also applies to necessary expenses for the spouse of
a Member, officer, or employee in the case of foreign travel. The Com-
mittee recognizes that the ability of a spouse to accompany a Member
on a foreign trip is often a matter of protocol and therefore has diplo-
matic value. However, the Committee does not believe that there would
be many instances in which the presence of the spouse would be neces-
sary or appropriate in the case of domestic fact-finding events.
The Committee notes that the phrase "fact-finding event or activity"
does not apply to situations where expenses are provided in considera-
tion of personal services rendered. In those cases where the purpose of
a Member's trip is to provide such services as delivering a major speech
to a convention, necessary expenses are not considered to be a gift (see
Advisory Opinion #2, issued April 6, 1977). In comparison, although
a Member of Congress may render some personal services in the course
of a fact-finding event, the primary purpose of the trip is for the Mem-
1 In Advisory Opinion No. 7. the Committee held that Rule XLIII. clause 4 does not
apply to travel expenses provided on an official basis by federal, state or local govern-
ments, or provided by a foreign government within a foreign country.
150
bers, officers, or employees to become better informed regarding subject
matters closely related to their official duties.
Additionally, the Select Committee emphasizes that the definition
of a '"fact-finding event" must be interpreted narrowly. House Rule
XLIII, clause 2 puts Members on notice that not only the "letter'
but also the "spirit" of Hou.se Rules must be adhered to. Therefore,
since Members are already provided travel expenses to and from their
own districts, a Member should not accept free transportation on a
corporate jet or commercial flight from Washington to his district, on
grounds that he would "tour" the corporate facilities there. Neither
would the exemption apply, for example, to travel expenses provided
by representatives of the maritime industry to attend a ship-launching.
The intended definition of a fact-finding event would also not extend
to expenses incurred during such an event which are unrelated to the
specific fact-finding activity. For example, if a Member spends two
days attending an educational event in a foreign country and then
spends several more days touring that country at his ieisure, the
expenses associated with the sight-seeing tour would not be exempted
from the Rule. Similarly, this exemption for fact-finding activities
applies only to necessary expenses (transportation, food', and lodging)
and not to entertainment. Thus, a Member of Congress, whether travel-
ing on a fact-finding tour or under any circumstances, may not accept
gifts of entertainment from groups with a direct interest in legislation
beyond the $100 limit imposed by Rule XLIII.
The Committee also emphasizes that to qualify for the exemption,
the fact-finding event or activity must bear a direct relationship to
official duties. The responsibility will rest with the Member, officer, or
employee to determine whether the particular event or activity is in-
tended for fact-finding purposes directly related to his official duties.
SUMMARY OPINION
A Member, officer, or employee of the House (and the individual's
spouse in the case of foreign travel) may be paid or reimbursed for
transportation, food, and lodging expenses provided by the sponsor
of a fact-finding event or activity which is directly related to official
duties. Such reimbursements or payments aggregating $250 or more in
value from one source would be disclosed in accordance with the pro-
visions of section 102(2) (C) of the Ethics in Government Act (PL
95-521).
The Committee emphasizes that this holding has no bearing on any
constitutional or statutory prohibition regarding acceptance of gifts
from foreign governments or their representatives.
Advisory Opinion No. 9
SUBJECT
Definition of an indirect gift for purposes of House Rule XLIII.
clause 4.
151
REASON FOR ISSUANCE
The Select Committee has received a number of requests for an ad-
visory opinion interpreting what constitutes an "indirect gift" to a
Member, officer, or employee for purposes of applying the new gifts
provision in House Rules.
BACKGROUND AND DISCUSSION
House Ride XLIII, clause 4 provides that a Member, officer, or em-
ployee shall not accept gifts in any calendar year aggregating $100 or
more in value, directly or indirectly, from any party with a direct in-
terest in legislation before the Congress.
The word "indirectly" has principal reference to gifts to the spouse
or dependent of a Member, officer, or employee of the House of Rep-
resentatives. 1 For example, if a Member would be personally barred
from receiving a color television set from a registered lobbyist, ob-
viously it would not be appropriate for the Member's spouse or de-
pendents to receive such a gift. Therefore, as a general rule, gifts re-
ceived by the spouse or dependent of a Member, officer, or employee of
the House from a party with a direct interest in legislation before the
Congress would be considered to be indirect gifts to the Member, officer,
or employee. Failure to so apply the gifts provision to spouses and
dependents could cause the intent of the Rule to be easily defeated.
The issue is not simply one of preventing circumvention of the gifts
provision, but also a common sense recognition that assets and hold-
ings of a spouse and dependents are generally considered to be shared
by the partner, i.e., the Member, officer, or employee. However, in find-
ing that the gifts to a spouse or dependent generally constitute an in-
direct gift to a Member, officer, or employee because of the nature of
the relationship involved, the Select Committee is well aware that
where a truly independent status is identified, considerations of pri-
vacy and equal rights should be controlling.
Therefore, the following guidelines are set forth by the Select Com-
mittee to clarify when gifts to spouses and dependents would not be
considered as indirect gifts to the Member, officer, or employee of the
House for purposes of Rule XLIII, clause 4.
A spouse or dependent may frequently receive a gift from an em-
ployer or another person which is prompted by recognition of their
services, friendship, or some other consideration unrelated to the of-
ficial responsibilities of the Member, officer, or employee. When it is
clear that such gifts are truly independent of the Member, officer, or
employee and would have been offered regardless of the donee's relation
to that person, such gifts would not be considered as indirect gifts for
purposes of Rule XLIII. However, when it is apparent that the gift
may not have been offered hut for the donee's relation to a Member,
officer or employee, such a gift would constitute an indirect gift to
the Member, officer, or employee.
An additional clarification that has been requested concerns the
treatment of "simultaneous gifts" to a Member, officer, or employee
1 The word "Indirectly" also refers to gifts received by a Member, officer, or employee
through or from a third party. For example, a Member or employee could not accept a
gift from an agent of a person with a direct interest in legislation before the Congress who
had actually paid for the gift.
152
and his spouse or dependents. For example, an individual or organiza-
tion with a direct interest in legislation before the Congress may well
invite a Member's family to a dinner or reception. The question is
whether such gifts should be aggregated or considered as separate
gifts in relation to the provision of Kule XLIII, clause 4 which ex-
empts all gifts valued at $35 or less. For example, the question has been
raised : "Would a dinner costing $20 each for a Member and his spouse
be considered as one $40 gift or as two $20 gifts (thus falling under
the $35 exemption)?"
The legislative history of the amendment to Rule XLIII, clause 4
clearly indicates that the intent of the "de minimis" exemption for gifts
of less than $35 in value was to avoid imposing excessively burdensome
recordkeeping requirements and to ignore insubstantial gifts which do
not present any potential conflict of interest. Furthermore, it would
seem to serve no public policy consideration to prohibit a Member from
attending a reception with his spouse and dependents, but to allow the
Member to attend such a reception alone. Therefore, the Select Com-
mittee finds that simultaneous gifts valued at $35 or less should not
be aggregated, but rather should be considered as separate gifts.
SUMMARY OPINION
Gifts to a spouse or dependent are considered indirect gifts to the
Member, officer, or employee for purposes of House Rule XLIII, clause
4, unless such gifts are prompted by some consideration unrelated to
the Member, officer, or employee. Simultaneous gifts such as dinner
or reception invitations to a Member «nd his spouse and dependents
should be treated as separate gifts and not be aggregated. Therefore,
unless an individual gift is valued at more than $35, it would be ex-
empted for purposes of Rule XLIII, clause 4.
Advisory Opinion No. 10
SUBJECT
Who has a direct interest in legislation before the Congress?
reason for issuance
The Select Committee has been requested to issue interpretive
guidelines concerning who has "a direct interest in legislation before
the Congress" for purposes of applying, House Rule XLIII, clause 4.
BACKGROUND AND DISCUSSION
House Rule XLIII. clause 4 provides, in effect, that a Member, offi-
cer, or employee shall not accept gifts aggregating over $100 in value
in any calendar year from any party with a direct interest in legisla-
tion before the Congress. This Rule has restricted gifts to Members
since its adoption in 1968, when it prohibited Members, officers, and
153
employees from accepting gifts of "substantial value" from any party
with a direct interest in legislation before the Congress. However, the
term "direct interest in legislation " was neither defined nor discussed
in the legislative history surrounding Kule XLIII, and clause 4, itself
was essentially unenforceable because of the totally subjective nature
of the term "substantial value/'
On March 2, 1977, the House amended Rule XLIII, clause 4 by
defining the term "substantial value'' to mean gifts aggregating over
$100 in a calendar year. The Commission on Administrative Review,
in its report recommending that the Rule be amended (H. Doc. 95-73,
February 14, 1977) , noted that under the old Rule it was very diffi-
cult to define precisely who has a direct interest in legislation before
Congress, since almost every citizen has such an interest. The Com-
mission recommended that :
. . . the term "direct interest" should be defined so that it
includes, but is not limited to, any person or organization who
must file under the Federal Lobbying Act of 1946 or its suc-
cessor statute.
Therefore, H. Res. 287 amended House Rule XLIII, clause 4, to read,
in part :
Any person registered under the Federal Regulation of
Lobbying Act of 194(5 (or any successor statute), any officer
or director of such registered person, and any person re-
tained by such registered person for the purpose of influenc-
ing legislation before the Congress shall be deemed to have
a direct interest in legislation before the Congress.
The Select Committee also believes that any person, organization,
or corporation which retains or employs a lobbyist should be deemed
to have a direct interest in legislation. However, the Commission's
report also noted that others, in addition to registered lobbyists, may
well have a direct interest in legislation before the Congress, and that
Rule XLIII, clause 4 should be interpreted in such a way that Mem-
bers are "alerted to the need to exercise care in accepting gifts aggre-
gating over $100 in any calendar year from all sources."
The issue before the Select Committee is to clarify the term "direct
interest in legislation before the Congress." The Congreess, by the
very nature of the institution, represents individuals and groups with
a direct interest in legislation. Taxpayers anticipating a rebate, par-
ents petitioning for day care centers, etc., communicate with Members
of Congress concerning legislation of interest to them. In one sense,
therefore, most citizens have a "direct interest in legislation before the
Congress." But it is not the intent of Rule XLIII, clause 4 to bar all
gifts valued at more than $100 from concerned citizens interested in
federal legislation.
The problem for the Select Committee is to delineate to the extent
possible the point at which individuals or organizations are trans-
formed from being "concerned citizens" to those having a "direct
interest" in legislation, placing them in a class of donors from whom
Members may not accept certain gifts valued at more than $100.
Beyond registered lobbyists and persons or organizations which
employ lobbyists, there is another group of clearly identifiable indi-
45-937 O - 79 - 11
154
viduals and organizations that have a direct interest in the legislative
process, i.e., organizations which maintain a separate, segregated fund
for political purposes (a Political Action Committee as defined in Sec.
321 of the Federal Election Campaign Act of 1971) and the officers or
directors of such organizations. Additionally, consistent with FEC
regulations, any subordinate or affiliated organization of a "parent''
organization which maintains such a Political Action Committee
should certainly also be deemed to have a direct interest in legislation
before the Congress for purposes of Rule XLIII, clause 4. Of course,
persons who simply contribute to such a political fund would not be
included within this category.
However, there are clearly a number of individuals and groups
which neither retain paid lobbyists nor maintain a Political Action
Committee, yet have a very direct and substantial interest in legisla-
tion before the Congress. With this understanding, the Select Com-
mittee believes that Members should not accept gifts aggregating over
$100 in value from any individual or organization that the Member
knows has a distinct or special interest in influencing or affecting the
federal legislative process which sets such individual or organization
apart from the general public. In this context, the Select Committee
emphasizes the clear statement of intent issued by the Commission on
Administrative Review that Members should be "alerted to the need
to exercise care . . . in accepting gifts from, all sources' 1 ' 1 (emphasis
added). Implicit in this admonition is the understanding that while
individuals often receive gifts from non- relatives, and occasionally
from organizations, it is rare that such gifts are valued at more than
$100. Therefore, unless such a gift is from a close personal friend, it is
most likely offered because of the Member's position as a United States
Representative.
The Select Committee also notes that appropriate exceptions have
been made for purposes of Rule XLIII, clause 4 to allow acceptance
of certain categories of gifts, as set forth in Advisory Opinion #7,
even if such "gifts" are valued at more than $100. Thus, the Committee
reiterates that a Member, officer, or employee should be most careful
before accepting other forms of gifts from any source.
However, if the Member does not believe that the donor of the gift
has a distinct or special interest in the congressional legislative proc-
ess which sets him clearly apart from the general public, then the
Member should feel free to accept such gifts. Of course, gifts aggre-
gating over $100 from one source must be disclosed in accordance with
the new financial disclosure requirements of the Ethics in Government
Act (PL 95-521).
Finally, the question arises as to when legislation is considered to be
"before the Congress." A narrow construction might be confined to an
interest in a specific piece of legislation then pending before at least
one subcommittee, or any other subdivision, of either House. If the
Congress were not in session, for instance, no legislation would be be-
fore it, and unlimited gifts (subject only to disclosure requirements)
might then flow freely to favored legislators. Also, if the Congress
were in session, but the "direct interest" was in having a particular
piece of proposed legislation introduced, a narrow construction of the
prohibition might lead to the conclusion that the legislation was not
yet "before the Congress."
155
Clearly, in either of the two foregoing instances, a result incongru-
ous with the entire purpose of the gift restriction would occur. When
this purpose is the. red net ion of the tendency of certain types of gifts
to affect legislative action, then a narrow reading would invite a sub-
version of attempts at achieving that goal.
Therefore, the phrase "legislation before the Congress" should be
read broadly to include an ongoing special interest in affecting the
legislative process.
SUMMARY OPINION
For purpose of House Rule XLIII, clause 4, the following indi-
viduals and organizations are deemed to have a direct interest in legis-
lation before the Congress:
(l)(a) Any person, organization, or corporation registered
under the Federal Regulation of Lobbying Act of 1946, or any
successor statute ; and any person who is an officer or director of a
registered lobbyist, or a person who has been employed or retained
by a registered lobbyist for the purpose of influencing legislation
before the Congress;
(b) Any person, organization, or corporation which employs or
retains a registered lobbyist ;
(2) Any corporation, labor organization, or other organization
which maintains a separate, segregated fund for political pur-
poses (Political Action Committee as defined in the Federal Elec-
tion Campaign Act of 1971 (2 U.S.C. 441b)) ; any subordinate
or affiliated organization thereof; and the officers or directors of
such organizations; and
(3) Any other individual or organization which the Member,
officer, or employee knows has a distinct or special interest in in-
fluencing or affecting the federal legislative process which sets
such individual or organization apart from the general public.
Advisory Opinion No. 11
SUBJECT
The Select Committee has been asked whether a Member could accept
proceeds from a fund-raising event for the Member's unrestricted per-
sonal use, if the event were sponsored by a group independent of the
Member.
REASON FOR ISSUANCE
The Select Committee has been asked whether a Member could
accept proceeds from a fund-raising event for the Member's unre-
stricted personal use, if the event were sponsored by a group inde-
pendent of the Member.
BACKGROUND AND DISCUSSION
House Rule XLIII, clause 7. as amended on March 2, 1977, pro-
hibits the conversion of proceeds from testimonial dinners or other
156
fund-raising events to a Member's personal use. The Select Commit-
tee stated in Advisory Opinion Xo. 4 that a mass mailing constituted
a fund-raising event for purposes of Rule XLIII, clause 7, and con-
cluded that neither a Member nor his spouse could directly solicit
funds for personal use by a fund-raising technique such as a mass
mailing.
An additional question has been asked which concerns the acceptance
of funds for a Member's unrestricted personal use that are raised by
a group independent of the Member, his spouse, staff, or campaign
committee.
As a general proposition, House Rules do not affect the actions of
any individuals or organizations which are independent of a Member
of Congress. The issue before the Select Committee, however, is not
whether an independent group may conduct a fund-raising event, but
whether a Member may accept the proceeds of such an event given in
his behalf when such proceeds are for the Member's unrestricted per-
sonal use.
A major thrust of the provisions contained in the new House Rules
was to severely limit the potential for Members of Congress to use
their positions of influence for personal gain. In this context, there-
fore, it is irrelevant whether the Member himself solicits these funds,
or whether the Member accepts funds for personal use that are solicited
on his behalf by an independent committee.
Rule XLIII, clause 2 specifically states that a Member shall "ad-
here to the spirit and letter of the Rules of the House of Representa-
tives." The clear intent of clause 7 is to prevent the acceptance of pro-
ceeds from fund-raising events for personal use. Thus, to allow a
Member to accept such proceeds if raised by a paper "Dinner Commit-
tee," "Fund-raising Committee," or similar subterfuge would render
Rule XLIII, clause 7 meaningless.
Finally, the Committee recognizes the distinction between the treat-
ment of proceeds from a fund-raising event for purposes of Rule
XLIII, clause 7, and acceptance of gifts for purposes of Rule XLIII,
clause 4. Clause 4 does not prohibit the acceptance of gifts from any-
one who is not a foreign national or does not have a direct interest in
legislation before the Congress. Clause 7, however, addresses gifts from
fund-raising events, specifying that proceeds from such events should
not be treated as personal gifts, but as campaign contributions.
SUMMARY OPIXION
For purposes of House Rule XLIII, clause 7, a Member is prohib-
ited from accepting the proceeds from a fund-raising event for his un-
restricted personal use.
Advisory Opiniox No. 12
SUBJECT
Application and interpretation of House rule XLIV, financial
disclosure.
157
REASON FOR ISSUANCE
The Select Committee has received a number of inquiries regarding
the interpretation and application of the new financial disclosure re-
quirements under House rule XL1Y, as amended on March 2. 1977.
BACKGROUND AND DISCUSSION
Rule XLIV requires Members, officers, their principal assistants,
and professional committee staff to file an annual financial disclosure
statement with the Clerk of the House. The first disclosure statement
under the new Rule must be filed by April 30, 1978 and will cover only
the period from October 1 through December JJ, 1977. Thereafter,
each annual disclosure statement will relate to the preceding calendar
year.
In order to clarify the disclosure requirements, the Committee, pur-
suant to its authority under H. Res. 383, issues this Advisory Opinion
defining and interpreting the provisions of Rule XLIV, which re-
quires the following information to be disclosed :
(1) Income. — The source and amount of each item of income ag-
gregating $100 or more from one source. (Capital gains are excluded
from- the first filing .
(2) Gifts. — (A) The source, a brief description, and value of gifts
of transportation, lodging, food, or entertainment aggregating $250
or more from one source; and (B) the source, a brief description,
and value of all other gifts aggregating $100 or more from one source.
Exempted are gifts from relatives, gifts valued at $35 or less, and gifts
of personal hospitality of an individual in the personal residence of,
or on property owned by that individual.
The term "gift" means a payment, advance, forebearance, render-
ing, or deposit of money, or any thing of value, unless consideration
of equal or greater value is received, but does not include: (1) in-
heritances; (2) political contributions; (3) transportation, lodging,
food, and entertainment provided: (a) by federal, state, and local
governments, or political subdivisions thereof; or (b) within a for-
eign country by the government of that country ; (4) communications
to the offices of a Member, including subscriptions to newspapers and
periodicals; (5) suitable mementos of a function held in honor of the
Member, officer, or employee; (6) consumable products provided by
home-state businesses to a Member's office for distribution; and (7)
food and beverages consumed at banquets, receptions or similar events.
(N.B. This exemption does not include dinners for small groups at
restaurants or other such "private" events. )
In disclosing gifts, it is not necessary that exact dollar figures be
reported in every case. If the exact value of a gift is not reasonably
ascertainable, a good-faith estimate is sufficient for disclosure pur-
poses. In some cases involving "travel-related" expenses provided as a
gift to a reporting individual, it might be difficult to provide even
the approximate value of such expenses. Under these limited circum-
stances, a brief description of the nature of the expenses provided
would be sufficient for disclosure purposes.
Travel-related expenses provided to a Member or employee for his
personal benefit and which are unrelated to official duties are consid-
158
ered to be gifts. Travel-related expenses provided for speaking en-
gagements, fact-finding tours, etc., are not considered to be gifts and
should be disclosed as reimbursements (see below).
(3) Reimbursements. — The source and value of reimbursements, di-
rectly or indirectly, for expenditures aggregating $250 or more in
value from any one source. Exempted are reimbursements for travel-
related expenses provided by federal, state and local governments, or
political subdivisions thereof. Reimbursements provided by foreign
governments or by international governmental associations (e.g.,
NATO, Interparliamentary Union) are exempt. Such foreign travel-
related expenses are required to be disclosed elsewhere under the terms
of the Foreign Gifts and Decorations Act, as amended (Public Law
95-105).
Additionally, Members of Congress are often provided travel-
related expenses from campaign funds to make political appearances
on behalf of their colleagues or other candidates for federal office. Re-
imbursements for these campaign-related activities are exempt from
disclosure since such expenses are required to be disclosed elsewhere
under the Federal Election Campaign Act.
Disclosure of reimbursements is thus required for expenses provided
by non-governmental sources such as trade associations, foundations,
corporations, labor unions, educational institutions, and individuals.
This category would generally include items such as travel expenses
provided in connection with a speaking engagement or a fact-finding
event related to official duties, whether those expenses were reim-
bursed to the individual or paid directly by the sponsoring
organization.
Since reimbursements will often involve travel-related expenses
which are not provided directly to a Member or employee on an indi-
vidual basis, but rather involve an official group or delegation (as part
of a fact-finding tour. etc.). actual or estimated costs may not be rea-
sonably ascertainable. Therefore, whenever the exact or appropriate
value of travel-related expenses is not reasonably ascertainable, a brief
description of the itinerary or the nature of the expenses provided is
sufficient for disclosure purposes.
(4) Holdings. — The identity and category of value of any property
held, directly or indirectly, in a trade or business or for investment or
the production of income and which has a fair-market value of at least
$1,000 as of the close of the year. Items such as household goods, auto-
mobiles, and other personal property not principally held for invest-
ment purposes or the production of income need not be disclosed.
With respect to business interests, the reporting individual need
only disclose the category of value of his interest in the business and
not the assets and holdings of the business itself. Since the value of
holdings needs to be disclosed only within certain categories, an ap-
praised to determine the fair-market value should usually not be
necessary. However, in those few instances where it is difficult to
estimate even the category of value of an asset, the individual may
use any generally recognized indication of value provided that the
method of valuation is indicated on the disclosure form.
(5) Liabilities. — The identity and category of value of each per-
sonal liability owed, directly or indirectly, which exceeds $2,500 as
of the close of the year. This category applies to all personal loans,
159
whether secured or unsecured, and regardless of the repayment terms
or interest rates. Exempted, however, are mortgages secured by real
property which is the personal residence of a Member or his spouse in
the Washington, D.C. area or in the district ; or the principal residence
of any other reporting individual or his spouse. Also exempted from
disclosure are loans secured by automobiles and obligations to make
alimony or child-support payments. A contingent liability (e.g., if the
individual co-signs a note) need not be disclosed. Similarly, an indi-
vidual with an interest in a business, corporation, partnership, etc.,
need not list a liability of that organization.
(6) Security transactions. — The identity, date, and category of value
of any transaction, directly or indirectly, in securities or commodity
futures during the calendar year (beginning in 1978) which exceeds
$1,000 in value. The first filing to be made in 1978 does not require the
reporting of this information. Exempted are any transactions donat-
ing such securities to any tax-exempt organization, as defined in section
501(c)(3) of the IRS Code.
(7) Real property transactions. — The identity, date, and category
of value of any purchase or sale, directly or indirectly, of any interest
in real property which exceeds $1,000 in value as of the date of such
purchase or sale. This category requires the reporting of only real
property transactions. Any real property held for investment purposes
would be listed as a holding under item 4, as described above. As with
liabilities owed, transactions involving personal residence property
are exempted from disclosure.
Categories of Value. — A detailed net-worth statement is not required
under House Rule XLIV. Instead, financial interests and liabilities
need be disclosed only by categories of value. The categories of value
for items 4-7 are as follows: less than $5,000; between $5,000 and
$15,000; between $15,000 and $50,000; between $50,000 and $100,000;
and more than $100,000.
Spouse disclosure
Rule XLIV requires disclosure of spouse interests if they are under
the "constructive control" of the reporting individual. This require-
ment has existed under House Rule XLIV since its original adoption
in 1968. As defined by the Committee on Standards of Official Conduct,
the financial interests of a spouse are regarded as constructively con-
trolled "if enhancement of those interests would substantially benefit
the person reporting. Normally, in the absence of specific property
division agreements, trusts, etc., the interests of spouses . . . would be
constructively controlled."
In view of the more detailed information now required to be dis-
closed, the Select Committee believes that clarification of spouse dis-
closure requirements is necessary.
Accordingly, the financial interests of a spouse should be reported
as follows: (1) source, but not amount, of spouse earned income ex-
ceeding $1,000; (2) gifts or reimbursements to the spouse, unless re-
ceived independent of the relationship to the reporting individual ;
and (3) assets and liabilities of the spouse unless the reporting indi-
vidual indicates that: (a) he or she neither derives, nor expects to
derive, any economic benefit from such interests; and (b) such inter-
ests were not obtained in any way from the assets or activities of the
reporting individual.
160
The assets and liabilities of a spouse must be reported in the same
manner as those of the reporting individual ; however, the person re-
porting need not identify such items as those of the spouse. The finan-
cial interests of a spouse living separate and apart from the reporting
individual need not be disclosed.
Advisory Opinion No. 13
subject: general interpretation of house rule xlvii, dealing with
limitations on members' outside earned income
7. General
(a) Purpose of rule. — House Rule XLVII, which was adopted on
March 2, 1977 as part of the financial ethics code, limits both the
amount of "outside earned income" a Member may have, and also the
amount a Member may accept as an honorarium for any single speech,
appearance, or article. Two major considerations prompted adoption
of the Rule. First, substantial payments to a Member of Congress for
rendering "personal services" to outside groups presents a significant
and avoidable potential for conflict of interest. Second, it is consistent
with the concept that being a Member of Congress is a full-time job to
permit a Member to have substantial earnings from other employment.
(b) Annual limitation generally. — Clause 1 of the Rule prohibits a
Member from having outside earned income attributable to any calen-
dar year beginning after December 31, 1978 in excess of 15% of the
Member's salary as a U.S. Representative for that year. In order for an
item to be counted against this limitation for a particular year: (i)
it must be "outside earned income", within the meaning of Rule
XLVII, and (ii) it must be attributable to that year. The Rule defines
outside earned income to mean "wages, salaries, professional fees, hon-
orariums, and other amounts (exclusive of copyright royalties) re-
ceived or to be received as compensation for personal services actually
rendered, not including the Member's salary as a U.S. Representative".
Outside earned income is attributed to the year in which the Mem-
ber's right to receive it becomes certain (i.e., under the accrual method)
rather than to the year of receipt. Therefore, receipt of income earned
during a particular year cannot be deferred to a future year in which
the Member has less outside earned income, or until after the Member
retires from Congress. The limitation is not applicable to compensation
for personal services rendered prior to January 1, 1979, the effective
date of Rule XLVII, or prior to the effective date of the Member's
becoming a U.S. Representative, if later. Outside earned income is
determined without regard to any community property law. That is,
even though under applicable community property law, one-half of
any personal service income earned by the Member is deemed to belong
to the spouse, all of such income is considered earned income of the
Member for purposes of the Rule.
(c) Real facts controlling. — The limitations imposed by Rule
XLVII may not be avoided by the characterization or disposition of
any payment for services rendered. In all cases, the real facts will con-
161
(vol. Fov example, if a Member's spouse, child, other velative, ov tvust
fov benefit of any of them, is paid an amount, however denominated,
and the true considevation fov the payment is services rendered by the
Member, the amount will be deemed outside earned income by the
Member. Similarly, the label ov chavactevization placed on a transac-
tion, arrangement or payment by the parties may be disregarded for
purposes of the Rule. Thus, if amounts received or to be received by a
Member are in fact attributable to any significant extent to services
rendered by the Member, the characterization of such amounts as part-
nership distributive shave, dividends, vent, intevest, payment fov a
capital asset, ov the like, will not serve to prevent the application of
Rule XLVII to such amounts. Moreover, the Rule applies to outside
earned income realized in a medium other than money, for example, in
property or services or through a bargain purchase or forbearance in
consideration of personal services rendered.
In short, income may not be recharacterized in order to circumvent
the Rule. Indeed, characterization of income is essentially irrelevant.
For purposes of this Opinion, there are two types of income — earned
and unearned. If the compensation received is essentially a return on
equity, then it would generally not be considered to be earned income.
If the income is not a return on equity, then such income would gener-
ally be considered to be earned income and subject to the limitation.
When such amounts received or to be received by a Member are des-
ignated as salary, fees, or commissions, the overriding presumption is
that such amounts, almost by definition, constitute compensation for
personal services rendered. An honorarium from a speaking engage-
ment, for example, is obviously outside earned income. AVith respect
to income from business ventures, the Committee is convinced that in
the overwhelming majority of cases, there will be little or no difficulty
in determining whether certain income is subject to the Rule. Again,
the facts of each individual case will govern applicability of the Rule,
but the principles set forth in this Opinion should be followed in mak-
ing that determination.
2. Outside earned income from business ventures
This Advisory Opinion differentiates between businesses in which
both capital and personal services are material income-producing fac-
tors and those in which personal services is the only material income-
producing factor.
(a) Personal service businesses. — Where a Member owns or partici-
pates in a personal service business, such as a professional practice, in
which capital is not a material income-producing factor, his entire
share of the profits is deemed to be outside earned income for purposes
of the Rule, except to the extent he can demonstrate that his income in
fact represents a return on investment. In general, capital is not a
material income-producing factor where gross income of the business
consists principally of fees, commissions ov other compensation for
personal services performed by an individual. Thus, the practice of
one's profession by a doctor, lawyer, insurance broker, or real estate
agent will not, as such, be treated as a business in which capital is a
material income-producing factor. Even where the practitioner may
have a substantial investment in professional equipment or in the
physical plant constituting the office from which he conducts his prac-
162
tice, the capital investment would be regarded as only incidental to the
professional practice.
Moreover, the fact that the Member may not personally participate
to any substantial extent in the rendering of services to the customers
or clients of the business, all such services being performed by assist-
ants or associates, would not serve to justify classification of his share
of the business income as other than earned income. If a Member shares
in the profits of a personal service organization without being required
to perform any significant productive services, absent a strong show-
ing to the contrary, it will be presumed that the Member is being com-
pensated for attracting or retaining customers or clients, and such
income is considered outside earned income.
Law practices. — Since there are a number of attorneys serving in the
House of Representatives, for purposes of example, application of the
Rule to practice of law is specifically addressed in this Opinion. Those
Members who currently maintain an active affiliation with a law firm
may now wish to enter into a buy-out agreement with their partners in
order to liquidate their equity in the firm. This is perfectly appropri-
ate. Amounts received or receivable by a Member in payment for his
interest in a laAv firm or similar organization upon his retirement
from it would not constitute outside earned income so long as the
amounts payable do not, in effect, represent a continuing participa-
tion in the law firm and the total amount payable is not in excess of
the fair market value of the Member's interest. Normally such arrange-
ments call for fixed payments at annual or more frequent intervals
over a period of years. In some cases, however, the retiring partner
and those continuing the business are unable to agree on a value for
one or more assets of the business, such as contingent fee cases or
accounts receivable of dubious value, and the buy-out agreement may
accordingly provide that the retiring partner will be paid a share of
such items, if, as and when they are collected.
Payments to a Member under a buy-out agreement will not be
deemed to be outside earned income where the arrangements are en-
tered into in good faith and agreed to by all the partners, and reflect
the usual and customary value of the equity generally accorded to
partners in similar law practices in the same geographic area. A buy-
out agreement should also be reasonably calculated to avoid the Mem-
ber's participation in post-withdrawal profits. In general, the proceeds
resulting from a buy-out agreement are taxed as capital gains. If such
an agreement is not limited to liquidation of the Member's equity in
the firm, and includes payments which might be taxable as earned in-
come, any such payments under the agreement might be subject to the
earned income limitation.
The Committee notes that Rule XL VII does not prohibit continued
affiliation with a law firm, as does the Senate Rule on outside earned
income. However, those Members who wish to retain an interest in a
law firm after the effective date of the Rule may be required to lessen
their active involvement in the firm because of the earned income lim-
itation. Accordingly, the Committee makes reference to the American
Bar Association Code of Ethics, which states in part : "A lawyer who
assumes ... a legislative post . . . shall not permit his name to remain
in the name of a law firm or to be used in the professional notices of
163
the firm during any significant period in which he is not actively and
regularly practicing law as a member of the firm." (ABA Disciplinary
Rule 2-102B). Depending upon the particular circumstances involved
in each case, this provision may have some bearing on a Member's con-
tinued affiliation with 9, law firm.
For those Members who will choose to remain formally affiliated
with a law firm, some of their income from the law firm may be in the
form of return on equity. In recognition of the principle that any
capital investment in a business is entitled to a reasonable return, this
Opinion provides that a Member may treat as unearned income a por-
tion of his share of the profits from the law firm, as from any other per-
sonal service business, equal to interest computed at 10 percent per an-
num on his investment in the business assets (after adjustment to ex-
clude investment income and expenses, if any). For purposes of this
10 percent computation, the Member's investment in business assets
will ordinarily be represented by the average balance of his capital ac-
count during the year, where the business interest is a proprietorship
or partnership, or by the average book value of his stock, where the in-
vestment is in a subchapter S corporation. In general, a Member's
equity in the firm would not exceed the amount he would receive pur-
suant to a buy-out agreement, and should be calculated to avoid any
benefit accruing to the Member from increased profits subsequent to the
effective date of the Rule.
(b) Businesses ichere capital is a material income- producing fac-
tor. — Capital is a material income-producing factor if a substantial
portion of the gross income of the business is attributable to the em-
ployment of capital, as reflected, for example, by a substantial invest-
ment in inventories, plant, machinery or other productive equipment.
This Opinion discusses the application of the Rule in such cases to in-
come frdm a fully taxable corporation and income from an unincor-
porated business or subchapter S corporation.
(1) Taxable corporations
If a Member renders services to a fully taxable business corporation,
he will not be deemed to realize outside earned income from such serv-
ices beyond the amount of salary or other form of extra compensation
designated as consideration for the personal services rendered. In those
cases where the Member's sole finanical interest is stock in the corpora-
tion, an increase in the net assets of the corporation would not be con-
sidered to be subject to the limitation. An increase in the value of stock
or other property is not ordinarily treated as earned income either
for tax purposes or under generally accepted accounting principles;
and any increase in the corporation's net profits would be subject first
to corporate income tax and then to personal income tax before the
Member receives any resulting increment to his wealth through a div-
idend or sale of his stock. The foregoing has no application, of course,
to income which a Member earns through his personal efforts in deal-
ings with third parties but causes to be paid to a corporation and then
distributed to him. For example, if a Member incorporates himself for
the purpose of conducting a speaking business, and all fees for his
speaking engagements are paid to the corporation from which he then
draws "profits", all such amounts would be considered to be outside
earned income.
164
In sum, if a Member renders services to a taxable corporation, only
the salary or other compensation he receives for those services would be
subject to the limitation, but not any increase in the corporation's
assets or his share of the profits. This ruling is consistent with the
intent of the Commission on Administrative Review which recom-
mended the limitation on outside earned income. In its report (Docu-
ment No. 95-73) , the Commission stated that ". . . Members should be
able to render personal services to manage or protect their equity . . .
without having to allocate these personal services toward the 15 per-
cent limitation."
(2) /Subchapter S corporation, partnership, unincorporated business
In those cases where the Member has an ownership interest in a busi-
ness for which he also performs services, as in a subchapter S corpora-
tion or a partnership, some part of his share of the profits of that busi-
ness may reflect the value of his services, and thus would be considered
outside earned income. The determining factor is whether the Mem-
ber's personal services generate significant income for the business. Of
course, if the Member receives formal compensation from the business,
for example, payments designated as salary or fees, such amounts
would be considered earned income. Additionally, in those cases where
other partners or associates are providing capital and managerial
expertise, and the Member's principal role is to refer clients to the
business or to help retain existing customers or clients, the Member
would be deemed to be rendering income-producing services, even
though the actual time involved might be minimal. However, if the
Member is engaged primarily in the general oversight and manage-
ment or protection of his investment, his services would not be deemed
to generate significant income. Such non-income generating services
would include consultation with other management officials, analysis
of financial and other reports, participation in formal meetings, and
making decisions concerning the general operations and investment
strategy of the business.
The application of the Rule to the various types of business orga-
nizations as discussed in this Opinion applies equally to a business
owned or controlled by the Member or his family. Again, the deter-
mining factor is whether or not the personal services of the Member
actually generate any significant income for the business. In those
situations where the services rendered by the Member are incidental
and do not generate significant income, no part of his share of the
profits or any increase in the assets of the business would be deemed
to be outside earned income.
The Committee emphasizes that the definition of earned income in
Rule XLVII, which excludes amounts received by a Member from a
family controlled business "so long as the personal services actually
rendered by the Member ... do not generate a significant amount of
income," was simply intended to assure Members that they could con-
tinue to make decisions and take actions necessary to manage or pro-
tect their equity in a family trade or business, and would not be forced
to divest themselves of their family business interests. As with any
business, a Member would not be required to allocate his share of the
profits of the business as outside earned income when the facts and
circumstances show that the income is in reality a return on invest-
165
ment. For example, if the Member owns a hardware store and tho
services he renders are incidental, such as occasionally serving cus-
tomers, the income received from the business is basically a return on
equity, (i.e., profits from the sale of hardware goods) and is not gen-
erated by the Member's services. Similarly, if the Member's family
owns a farm and the Member gives overall direction to the manage-
ment of the business, the income received from the farming operations
is not generated by the Member's personal services, but rather is
basically a return on equity from the sale of crops or dairy products.
These types of businesses are distinguishable from a personal service
business where income is essentially produced by the services of the
individual affiliated with the organization.
3. When income is accountable
(a) Income from pre -effective date services. — The Ride excludes
from earned income any compensation derived by a Member for per-
sonal services actually rendered prior to the effective date of the Rule
(January 1, 1979) or prior to the effective date of the Member's be-
coming a U.S. Representative, if later. This provision would serve to
exclude from the limitation, for example, most renewal commissions
paid to a Member with respect to life insurance policies sold by him
prior to the effective date, or similar commissions received by a Mem-
ber with respect to pre-effective date leases in which the Member was a
leasing agent. In most such arrangements, payment of the commission
is not contingent upon the performance of any future services by the
recipient; the only contingency is that the insured or lessee continue
to pay premiums or rent, as the case may be. The pre-effective date
exclusion would also apply to a fee received by a lawyer-Member after
the effective date where all the work had been done prior to the effec-
tive date. However, this exclusion would not apply to income derived
from the continuing or future business of clients brought into the firm
prior to the effective date of the Rule.
(b) Application of limitation to part years. — Where an individual
becomes a Member during any calendar year beginning after Decem-
ber 31, 1978, the Rule applies only to outside earned income of the new
Member attributable to periods after the effective date of his becoming
a Member. For the balance of the calendar year in which he becomes a
Member, the applicable limitation will be 15% of the Members salary
as a U.S. Representative for that part year, and only outside earned
income attributable to that part year is counted against the limitation.
4. Other provisions
(a) Payments attributed to deferred compensation plans. — Amounts
received by a Member from a tax-qualified pension, profit-sharing or
stock bonus plan are not treated as outside earned income, as provided
in the Rule, nor are contributions to such a plan counted as outside
earned income. Amounts received by a Member from a non-qualified
deferred compensation plan which were earned in a year prior to the
effective date of the Rule are not outside earned income for the year
received under the principle explained in Section 3(a), provided no
part of the consideration for such payments is current services.
Amounts set aside for a Member under a non-qualified deferred com-
pensation plan for services rendered after the effective date of the
Rule will generally constitute outside earned income of the Member
166
for that year, even though they will not be received until a later
year, unless receipt is subject to a substantial risk of forfeiture.
(b) Assignment of income to charities. — Notwithstanding the gen-
eral holding of this Opinion that a Member cannot deflect the appli-
cation of the Rule by assigning to another income which he in fact
earned through rendering services, earned income assigned by a Mem-
ber to a tax-exempt charity will not be counted as part of the Mem-
ber's outside earned income, provided the Member is not a "disquali-
fied person" with respect to the recipient organization within the
meaning of section 4946(a) of the Internal Revenue Code. For pur-
poses of the Rule, such income would not be deemed to have been "re-
ceived" by the Member provided that he did not personally benefit in
any way from such income.
(c) Honoraria. — Clause 2 of Rule XLVII provides that no Mem-
ber may, in any calendar year beginning after December 31, 1978,
accept any honorarium of more than $750 in value for any single
speech, appearance, or article by the Member. In computing the
amount of any honorarium for purposes of the $750 limitation, there
shall not be taken into account the reimbursement of any actual and
necessary travel expenses incurred by the Member in earning the hon-
orarium. To the extent any such travel expenses are not reimbursed,
the amount of the honorarium shall be reduced accordingly. Payment
of actual and necessary travel expenses of a spouse (or another family
member) accompanying the Member is also excluded from the limita-
tion, consistent with the Federal Election Commission regulations gov-
erning receipt of honoraria.
Under Section 1(b) of this Opinion, outside earned income is at-
tributed to the year in which the Member's right to receive it becomes
certain rather than to the year of receipt, (i.e., the accrual method).
With respect to honoraria, however, the accrual method could cause
some particular confusion in the case of a Member giving a speech in
December but not receiving actual payment until January. Because of
the potential problems that could arise, Members would have the lim-
ited option of using a cash basis for receipt of honoraria for purposes
of the Rule.
167
5. Code of Ethics for Government Service, 72 Stat. Part 2, B 12
Code of Ethics for Government Service
Resolved by the House of Representatives (the Senate concurring),
That it is the sense of the Congress that the following Code of Ethics
should be adhered to be all Government employees, including office-
holders:
CODE OF ETHICS FOR GOVERNMENT SERVICE
Any person in Government service should :
1 . Put loyalty to the highest moral principles and to country above
loyalty to persons, party, or Government department.
2. Uphold the Constitution, laws, and legal regulations of the
United States and of all governments therein and never be a party
to their evasion.
3. Give a full day's labor for a full day's pay; giving to the per-
formance of his duties his earnest effort and best thought.
4. Seek to find and employ more efficient and economical ways of
getting tasks accomplished.
5. Never discriminate unfairly by the dispensing of special favors
or privileges to anyone, whether for remuneration or not; and never
accept, for himself or his family, favors or benefits under circum-
stances which might be construed by reasonable persons as influencing
the performance of his governmental duties.
6. Make no private promises of any kind binding upon the duties
of office, since a Government employee has no private word which can
be binding on public duty.
7. Engage in no business with the Government, either directly or
indirectly, which is inconsistent with the conscientious performance
of his gov ernmental duties.
8. Never use any information coming to him confidentially in the
performance of governmental duties as a means for making private
profit.
9. Expose corruption wherever discovered.
10. Uphold these principles, ever conscious that public office is a
public trust.
(Passed July 11, 1958.)r :
* U 6. 2 tJ.S.C. Sec. 86
§86. Division of Salaries of Employees of House of Representatives
It shall not be lawful to appoint or employ in any position under
the House of Representatives more than one person at any one time,
or to require or permit any such person to divide with another any
portion of his salary or compensation while so employed.
(Mar. 3, 1901, c. 830, § 1, 31 Stat. 968.)
* " *7. 2 U.S.C. Sec. 87
§ 87. Requiring or Permitting Employees of House of Representatives To Sublet
Duties
It shall not be lawful to require or permit any person in the employ
of the House of Representatives to sublet to another the discharge of
any portion of the duties of the position to which he is appointed.
(Mar. 3, 1901, c. 830, § 1, 31 Stat. 968.)
168
Cross References: Subletting duties of an employee of Senate or House for-
bidden, see section 101 of this title.
8. 2 U.S.C. sec. 101
§ 101. Subletting duties of employees of Senate or House of Representatives
No employee of Congress, either in the Senate or House, shall sublet
to, or hire, another to do or perform any part of the duties or work at-
tached to the position to which he was appointed.
(Mar. 2, 1895, c. 177, § 1, 28 Stat. 771.)
9. 2 U.S.C. sec. 441i
§441i. Acceptance of excessive honorariums — Prohibited practices
(a) No person while an elected or appointed officer or employee of
any branch of the Federal Government shall accept —
(1) any honorarium of more than $2,000 (excluding amounts
accepted for actual travel and subsistence expenses for such person
and his spouse or an aide to such person, and excluding amounts
paid or incurred for any agents' fees or commissions) for any ap-
pearance, speech, or article; or
(2) honorariums (not prohibited by paragraph (1) of this sec-
tion) aggregating more than $25,000 in any calendar year.
PAYMENT OF HONORARIUM TO CHARITABLE ORGANIZATION; DEFINITION
(b) If an honorarium payable to a person is paid instead at his re-
quest to a charitable organization selected by payor from a list of 5 or
more charitable organizations provided by that person, that person
shall not be treated, for purposes of subsection (a) of this section, as
accepting that honorarium. For purposes of this subsection, the
term "charitable organization" means an organization described in
section 170(c) of Title 26.
AGGREGATE AMOUNT RECEIVED DURING ANY CALENDAR YEAR
(c) For purposes of determining the aggregate amount of honorar-
iums received by a person during any calendar year, amounts returned
to the person paying an honorarium before the close of the calendar
year in which it was received shall be disregarded.
TIME OF ACCEPTANCE OF HONORARIUM
(d) For purposes of paragraph (2) of subsection (a) of this section,
an honorarium shall be treated as accepted only in the year in which
that honorarium is received.
(As amended Pub.L. 95-216, Title V, § 502(a), Dec. 20, 1977, 91
Stat. 1565.)
1977 Amendment: Pub.L. 95-216 designated existing provisions as subsec. (a),
and added subsecs. (b) to (d).
Effective Date of 1977 Amendment: Section 502(b) of Pub.L. 95-216 provided
that: "The amendments made by subsection (a) [to this section] shall apply with
respect to any honorarium received after December 31, 1975."
Legislative History: For legislative history and purpose of Pub.L. 95-216, see
1977 U.S. Code Cong, and Adm.News, p. 4155.
169
10. 2 U.S.C. sec. 701 et seq.
Public Law 95-521, 95th Congress
AN ACT To establish certain Federal agencies, effect certain reorganizations of the
Federal Government, to implement certain reforms in the operation of the
Federal Government and to preserve and promote the integrity of public officials
and institutions, and for other purposes
Be it enacted by the Senate and House of Representatives oj the United
States of America in Congress assembled, That this Act may be cited as
the "Ethics in Government Act of 1978".
TITLE I— LEGISLATIVE PERSONNEL FINANCIAL
DISCLOSURE REQUIREMENTS
COVERAGE
Sec. 101. (a) Each Member in office on May 15 of a calendar year
shall file on or before May 15 of that calendar year a report containing
the information as described in section 102(a).
(b) Any individual who is an officer or employee of the legislative
branch designated in subsection (e) during any calendar year and per-
forms the duties of his position or office for a period in excess of sixty
days in that calendar year shall file on or before May 15 of the suc-
ceeding year a report containing the information as described in section
102(a)'.
(c) Within thirty days of assuming the position of an officer or em-
ployee designated in subsection (e), an individual other than an indi-
. idual employed in the legislative branch upon assuming such position
shall file a report containing the information as described in section
102(b) unless the individual has left another position designated in
subsection (e) within thirty days prior to assuming his new position.
This subsection shall take effect on January 1, 1979.
(d) Within thirty clays of becoming a candidat in a calendar year
for any election for the office of Member, or on or before May 15 of
that calendar year, which ever is later, but in no event later than
seven days prior to the election, and on or before May 15 of each
successive year the individual continues to be a candidate, an indi-
vidual shall file a report containing the information as described in
section 102(b).
(e) The officers and employees referred to in subsections (b) and
(c) are —
(1) each officer or employee of the legislative branch who is
compensated at a rate equal to or in excess of the annual rate of
basic pay in effect for grade GS-16 of the General Schedule; and
(2) at least one principal assistant designated for purposes of
this section by each Member who does not have an employee com-
pensated at a rate equal to or in excess of the annual rate of basic
pay in effect for grade GS-16 of the General Schedule.
For the purposes of this title, the legislative branch includes the
Architect of the Capitol, the Botanic Gardens, the Congressional
Budget Office, the Cost Accounting Standards Board, the General
Accounting Office, the Government Printing Office, the Library of
Congress, the Office of the Attending Physician, and the Office of
Technology Assessment.
170
(f) Reasonable extensions of time for filing any report may be
granted by the designated committee of the Senate with respect to
those filing with the Secretary and by the designated committee of the
House of Representatives with respect to those filing with the Clerk
but in no event may the extension granted to a Member or candidate
result in a required report being filed later than seven days prior to an
election involving the Member or candidate. If the day on which a
report is required to be filed falls on a weekend or holiday, the report
may be filed on the next business day.
(g) Notwithstanding the dates specified in subsection (d) of this
section, an individual who is a candidate in calendar year 1978 shall
file the report required by such subsection not later than November 1,
1978, except that a candidate for the Senate who has filed a report as of
such date pursuant to the Rules of the Senate need not file the report
required by subsection (d) of this section.
CONTENTS OF REPORTS
Sec. 102. (a) Each report filed pursuant to subsections (a) and (b)
of section 101 shall include a full and complete statement with respect
to the following:
(1)(A) The source, type, and amount or value of income
(other than income referred to in subparagraph (B)) from any
source (other than from current employment by the United States
Government), and the source, date, and amount of honoraria
from any source, received during the preceding calendar year,
aggregating $100 or more in value.
(B) The source and type of income which consists of divi-
dends, interest, rent, and capital gains, received during the pre-
ceding calendar year which exceeds $100 in amount or value,
and an indication of which of the following categories the amount
or value of such item of income is within:
(i) not more than $1,000,
(ii) greater than $1,000 but not more than $2,500,
(iii) greater than $2,500 but not more than $5,000,
(iv) greater than $5,000 but not more than $15,000,
(v) greater than $15,000 but not more than $50,000,
(vi) "greater than $50,000 but not more than $100,000, or
(vii) greater than $100,000.
(2) (A) The identity of the source and a brief description of
an}^ crifts of transportation, lodging, food, or entertainment
aggregating $250 or more in value received from any source other
than a relative of the reporting individual during the preceding
calendar year, except that any food, lodging, or entertainment
received as personal hospitality of any individual need not be
reported, and any gift with a fair market value of $35 or less
need not be aggregated for purposes of this subparagraph.
(B) The identity of the source, a brief description, and the
value of all gifts other than transportation, lodging, food, or
entertainment aggregating $100 or more in value received from
any source other than a relative of the reporting individual during
the preceding calendar year, except that any gift with a fair
market value of $35 or less need not be aggregated for purposes
of this subparagraph. A gift need not be so aggregated if in an
unusual case, a publicly available request for a waiver is granted.
171
(C) The identity of the source and a brief description of reim-
bursements received from any source aggregating $250 or more in
value and received during the preceding calendar year.
(3) The identity and category of value of any interest in prop-
erty held during the preceding calendar year in a trade or busi-
ness, or for investment or the production of income, which has a
fair market value which exceeds $1,000 as of the close of the pre-
ceding calendar year, excluding any personal liability owed to the
reporting individual by a relative or any deposits aggregating
$5,000 or less in a personal savings account. For purposes of this
paragraph, a personal savings account shall include any certificate
of deposit or any other form of deposit in a bank, savings and
loan association, credit union, or similar financial institution.
(4) The identity and category of value of the total liabilities
owed to any creditor other than a relative which exceed $10,000
at any time during the preceding calendar year, excluding —
(A) any mortgage secured by real property which is a
personal residence of the reporting individual or his spouse;
(B) any loan secured by a personal motor vehicle, house-
hold furniture, or appliances, which loan does not exceed the
purchase price of the item which secures it.
With respect to revolving charge accounts, only those with an
outstanding liability which exceeds $10,000 as of the close of the
preceding calendar year need be reported under this paragraph.
(5) Except as provided in this paragraph, a brief description,
the date, and category of value of any purchase, sale, or exchange
during the preceding calendar year which exceeds $1,000 —
(A) in real property, other than property used solely as a
personal residence of the reporting individual or his spouse;
or
(B) in stocks, bonds, commodities futures, and other forms
of securities.
Reporting is not required under this paragraph of any transaction
solely by and between the reporting individual, his spouse, or
dependent children.
(6) The identity of all positions on or before the date of filing
during the current calendar year as an officer, director, trustee,
partner, proprietor, representative, emplo}^ee, or consultant of
any corporation, company, firm, partnership, or other business
enterprise, any nonprofit organization, any labor organization, or
any educational or other institution other than the United States.
This paragraph shall not require the reporting of positions held
in any religious, social, fraternal, or political entity and positions
solely of an honorary nature.
(7) A description of the date, parties to, and terms of any agree-
ment or arrangement with respect to: (A) future employment;
(B) a leave of absence during the period of the reporting indi-
vidual's Government service ; (C) continuation of payments by a
former employer other than the United States Government ; and
(D) continuing participation in an employee welfare or benefit
plan maintained by a former employer.
(b) Each report filed pursuant to subsections (c) and (d) of sec-
tion 101 shall include a full and complete statement with respect to
the information required by paragraphs (3), (4\ (G), and (in the case
172
of reports filed pursuant to subsection (c) of section 101) (7) of sub-
section (a), as of a date, specified in such report, which shall be not
more than thirty-one days prior to the date of filing, and the informa-
tion required by paragraph (1) of subsection (a) for the year of filing
and the preceding calendar year.
(c)(1) The categories for reporting the amount or value of the items
covered in paragraphs (3), (4) and (5) of subsection (a) are as follows:
(A) not more than $5,000;
(B) greater than $5,000 but not more than $15,000;
(C) greater than $15,000 but not more than $50,000;
(D) greater than $50,000 but not more than $100,000;
(E) greater than $100,000 but not more than $250,000; and
(F) greater than $250,000.
(2) For the purposes of paragraph (3) of subsection (a) if the current
value of an interest in real property (or an interest in a real estate
partnership) is not ascertainable without an appraisal, an individual
may list (A) the date of purchase and the purchase price of the interest
in the real property, or (B) the assessed value of the real property for
tax purposes, adjusted to reflect the market value of the property
used for the assessment if the assessed value is computed at less than
100 percent of such market value, but such individual shall include in
his report a full and complete description of the method used to deter-
mine such assessed value, instead of specifying a category of value
pursuant to paragraph (1) of this subsection. If the current value of
any other item required to be reported under paragraph (3) of sub-
section (a) is not ascertainable without an appraisal, such individual
may list the book value of a corporation whose stock is not publicly
traded, the net worth of a business partnership, the equity value of an
individually owned business, or with respect to other holdings, any
recognized indication of value, but such individual shall include in his
report a full and complete description of the method used in deter-
mining such value. In lieu of any value referred to in the preceding
sentence, an individual may list the assessed value of the item for tax
purposes, adjusted to reflect the market value of the item used for the
assessment if the assessed value is computed at less than 100 percent
of such market value, but a full and complete description of the
method used in determining such assessed value shall be included in
the report.
(d)(1) Except as provided in the last sentence of this paragraph,
each report shall also contain information listed in paragraphs (1)
through (5) of subsection (a) respecting the spouse or dependent child
of the reporting individual as follows:
(A) The source of items of earned income earned by a spouse
from any person which exceed $1,000 and, with respect to a
spouse or dependent child, all information required to be reported
in subsection (a)(1)(B) with respect to income derived from any
asset held by the spouse or dependent child and reported pursuant
to paragraph (3). With respect to earned income, if the spouse is
self-employed in business or a profession, only the nature of such
business or profession need be reported.
(B) In the case of any gift which is not received totally inde-
pendent of the spouse's relationship to the reporting individual,
the identity of the source and a brief description of gifts of trans-
portation, lodging, food, or entertainment or a brief description
and the value of other gifts.
173
(C) In the case of any reimbursement which is not received
totally independent of the spouse's relationship to the reporting
individual, the identity of the source and a brief description of
the reimbursement.
(D) In the case of items described in paragraphs (3) through
(5), all information required to be reported under these para-
graphs other than items (i) which the reporting individual cer-
tifies represent the spouse or dependent child's sole financial
interest or responsibility and which the reporting individual has
no knowledge of, (ii) which are not in any way, past or present,
derived from the income, assets, or activities of the reporting
individual, and (iii) from which the reporting individual neither
derives, nor expects to derive, any financial or economic benefit.
Each report referred to in subsection (b) of this section shall, with
respect to the spouse and dependent child of the reporting individual,
only contain information fisted in paragraphs (1), (3), and (4) of
subsection (a) , as specified in this paragraph.
(2) No report shall be required with respect to a spouse living sepa-
rate and apart from the reporting individual with the intention of
terminating the marriage or providing for permanent separation; or
with respect to any income or obligations of an individual arising from
the dissolution of his marriage or the permanent separation from his
spouse.
(e)(1) Except as provided in paragraph (2), each reporting indi-
vidual shall report the information required to be reported pursuant to
subsections (a) and (b) of this section with respect to the holdings of
and the income from a trust or other financial arrangement from which
income is received by, or with respect to which a beneficial interest in
principal or income is held by, such individual, his spouse, or any
dependent child.
(2) A reporting individual need not report the holdings of or the
source of income from any of the holdings of —
(A) any qualified blind trust (as defined in paragraph (3)); or
(B) a trust —
(i) which was not created directly by such individual, his
spouse, or any dependent child, and
(ii) the holdings or sources of income of which such in-
dividual, his spouse, and any dependent child have no knowl-
edge of,
but such individual shall report the category of the amount of in-
come received by him, his spouse, or any dependent child from the
trust under subsection (a)(1)(B) of this section.
(3) For purposes of this subsection, the term "qualified blind trust"
includes any trust in which a reporting individual, his spouse, or any
dependent child has a beneficial interest in the principal or income, and
which meets the following requirements :
(A) The trustee of the trust is a financial institution, an
attorney, a certified public accountant, or a broker, who (in the
case of a financial institution or investment company, any officer
or employee involved in the management or control of the trust
who) —
(i) is independent of and unassociated with any interested
, r party so that the trustee cannot be controlled or influenced
in the administration of the trust by any interested party,
174
(ii) is or has not been an employee of any interested party,
or any organization affiliated with any interested party and
is not a partner of, or involved in any joint venture or other
investment with, any interested party, and
(iii) is not a relative of any interested party.
(B) Any asset transferred to the trust by an interested party is
free of any restriction with respect to its transfer or sale unless
such restriction is expressly approved by the supervising ethics
office of the reporting individual.
(C) The trust instrument which establishes the trust provides
that —
(i) except to the extent provided in subparagraph (B) of
this paragraph, the trustee in the exercise of his authority
and discretion to manage and control the assets of the trust
shall not consult or notify any interested party;
(ii) the trust shall not contain any asset the holding of
which by an interested party is prohibited by any law or
regulation ;
(iii) the trustee shall promptly notify the reporting indi-
vidual and his supervising ethics office when the holdings of
any particular asset transferred to the trust by any interested
party are disposed of or when the value of such holding is less
than $1,000;
(iv) the trust tax return shall be prepared by the trustee or
his designee, and such return and any information relating
thereto (other than the trust income summarized in appro-
priate categories necessary to complete an interested party's
tax return), shall not be disclosed to any interested partv;
(v) an interested party shall not receive any report on the
holdings and sources of income of the trust, except a report
at the end of each calendar quarter with respect to the total
cash value of the interest of the interested party in the trust
or the net income or loss of the trust or any reports necessary
to enable the interested party to complete an individual tax
return required by law or to provide the information required
by subsection (a)(1)(B) of this section but such report shall
not identify anv asset or holding:;
(vi) except for communications which solely consist of
requests for distributions of cash or other unspecified assets
of the trust, there shall be no direct or indirect communica-
tion between the trustee and an interested party with respert
to the trust unless such communication is in writing and
unless it relates only (I) to the general financial interest and
needs of the interested party (including, but not limited to,
an interest in maximizing income or long-term capital gain) ,
(II) to the notification of the trustee of a law or regulation
subsequently applicable to the reporting individual which
prohibits the interested party from holding an asset, which
notification directs that the asset not be held bv the trust, or
(III) to directions to the trustee to sell all of an asset
initially placed in the trust by an interested party which in
the determination of the reporting individual creates a con-
flict of interest or the appearance thereof due to the sub-
sequent assumption of duties by the reporting individual
175
(but nothing herein shall require any such direction) ; and
(vii) the interested parties shall make no effort to. obtain
information with respect to the holdings of the trust, in-
cluding obtaining a copy of any trust tax return filed or any
information relating thereto except as otherwise provided
in this subsection.
(D) The proposed trust instrument and the proposed trustee
is approved by the reporting individual's supervising ethics office.
For purposes of this subsection "interested party" means a reporting
individual, his spouse, and any dependent child if the reporting indi-
vidual, his spouse, or dependent child has a beneficial interest in the
principal or income of a qualified blind trust; "broker" has the mean-
ing set forth in section 78 of title 15, United States Code; and "super-
vising ethics office" means the designated committee of the House of
Representatives for those who file their reports required b}^ this title
with the Clerk and the designated committee of the Senate for those
who file the reports required by this title with the Secretary.
(4) An asset placed in a trust by an interested party shall be con-
sidered a financial interest of the reporting individual, for the pur-
poses of section 208 of title 18, United States Code, and any other
conflict of interest statutes or regulations of the Federal Government,
until such time as the reporting individual is notified by the trustee
that such asset has been disposed of, or has a value of less than $1,000.
(5) (A) The reporting individual shall, within thirty days after
a qualified blind trust is approved by his supervising ethics office, file
with such office a copy of —
(i) the executed trust instrument of such trust (other than
those provisions which relate to the testamentary disposition of
the trust assets), and
(ii) a list of the assets which were transferred to such trust,
including the category of value of each asset as determined under
subsection (c)(1) of this section.
(B) The reporting individual shall, within thirty days of trans-
ferring an asset (other than cash) to a previously established qualified
blind trust, notify his supervising ethics office of the identity of each
such asset and the category of value of each asset as determined under
subsection (c)(1) of this section.
(C) Within thirty days of the dissolution of a qualified blind trust,
a reporting individual shall —
(i) notify his supervising ethics office of such dissolution, and
(ii) file with such office a copy of a list of the assets of the trust
at the time of such dissolution and the category of value under
subsection (c) of this subsection of each such asset.
(D) Documents filed under subparagraphs (A), (B), and (C) of
this paragraph and the lists provided by the trustee of assets placed in
the trust by an interested party which have been sold shall be made
available to the public in the same manner as a report is made available
under section 104, and the provisions of that section shall apply.
(E) A copy of each written communication with respect to the
trust under paragraph (3)(C)(vi) shall be filed by the person initiat-
ing the communication with the reporting individual's supervising
ethics office within five days of the date of the communication.
176
(6) (A) A trustee of a qualified blind trust shall not knowingly
or negligently (i) disclose any information to an interested party
with respect to such trust that may not be disclosed under paragraph
(3) of this subsection; (ii) acquire any holding the ownership of which
is prohibited by the trust instrument ; (iii) solicit advice from any
interested party with respect to such trust, which solicitation is pro-
hibited by paragraph (3) of this subsection or the trust agreement;
or (iv) fail to file any document required by this subsection.
(B) A reporting individual shall not knowingly or negligently (i)
solicit or receive any information with respect to a qualified blind trust
of which he is an interested party that may not be disclosed under
paragraph (3)(C) of this subsection, or (ii) fail to file any document
required by this subsection.
(C) (i) The Attorney General may bring a civil action in any appro-
priate United States District Court against any individual who know-
ingly and willfully violates the provisions of subparagraph (A) or
(B) of this paragraph. The court in which such action is brought may
assess against such individual a civil penalty in any amount not to
exceed $5,000.
(ii) The Attorney General may bring a civil action in any appro-
priate United States District Court against any individual who negli-
gently violates the provisions of subparagraph (A) or (B) of this
paragraph. The court in which such action is brought may assess
against such individual a civil penalty in any amount not to exceed
$1,000.
(7) Any trust which is in existence prior to the date of the enact-
ment of this Act shall be considered a qualified blind trust if —
(A) the supervising ethics office determines that the trust was
a good faith effort to establish a blind trust;
(B) the previous trust instrument is amended or, if such trust
instrument does not by its terms permit amendment, all parties
to the trust instrument, including the reporting individual and
the trustee, agree in writing that the trust shall be administered
in accordance with the requirements of paragraph (3)(C) and a
trustee is (or has been) appointed who meets the requirements of
paragraph (3) ; and
(C) a copy of the trust instrument (except testamentary provi-
sions), a list of the assets previously transferred to the trust by an
interested party and the category of value of each such asset at
the time it was placed in the trust, and a list of assets previously
placed in the trust by an interested party which have been sold are
filed and made available to the public as provided under para-
graph (5) of this subsection.
(f) Political campaign funds, including campaign receipts and
expenditures, need not be included in any report filed pursuant to this
title.
FILING OF REPORTS; DUTIES OF CLERK AND SECRETARY
Sec. 103. (a) The reports required by section 101 of Representa-
tives, Delegates to Congress, the Resident Commissioner from
Puerto Rico, officers and employees of the House, candidates seeking
election to the House, and officers and employees of the Architect of
the Capitol, the Botanic Gardens, the Congressional Budget Office,
the Government Printing Office, and the Library of Congress shall
be filed with the Clerk.
177
(b) The reports required by section 101 of Senators, officers and
employees of the Senate, candidates seeking election to the Senate,
and officers and employees of the General Accounting Office, the Cost
Accounting Standards Board, the Office of Technology Assessment,
and the Office of the Attending Physician shall be filed with the
Secretary.
(c) A copy of each report filed by a Member or an individual who
is a candidate for the office of Member shall be sent by the Clerk or
Secretary, as the case may be, to the appropriate State officer as desig-
nated in accordance with section 316(a) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 439(a)) of the State represented by
the Member or in which the individual is a candidate, as the case may
be, within the seven-day period beginning the day that the report is
filed with the Clerk or Secretary.
(d)(1) A copy of each report filed under this title with the Clerk
shall be sent by the Clerk to the designated committee of the House of
Representatives within the seven-day period beginning the day that
the report is filed.
(2) A copy of each report filed with the Secretary shall be sent by
the Secretary to the designated committee of the Senate.
(e) In carrying out then responsibilities under this title, the Clerk
and the Secretary shall avail themselves of the assistance of the Fed-
eral Election Commission. The Commission shall make available to
the Clerk and the Secretary on a regular basis a complete list of names
and addresses of all candidates registered with the Commission, and
shall cooperate and coordinate its candidate information and notifica-
tion program with the Clerk and the Secretary to the greatest extent
possible.
(f) In order to carry out responsibilities under this title —
(1) the Clerk shall, after consultation with the designated com-
mittee of the House of Representatives, and
(2) the designated committee of the Senate shall
develop reporting forms and may promulgate rules and regulations.
ACCESSIBILITY OF REPORTS
Sec. 104. (a) Except as provided in the second sentence of this
subsection, within fifteen calendar days after a report is filed with the
Clerk under this title, the Clerk shall make such report available for
public inspection at reasonable hours. With respect to reports required
to be filed by May 15 of any year, such reports shall be made available
for public inspection within fifteen calendar days after May 15 of such
year. A copy of any such report shall be provided by the Clerk to any
person upon request.
(b) Except as provided in the second sentence of this subsection,
within fifteen days after a report is filed with the Secretary under this
title, the Secretary shall make such report available for public inspec-
tion at reasonable hours. With respect to reports required to be filed
by May 15 of any year, such reports shall be made available for public
inspection within fifteen calendar days after May 15 of such year. A
copy of any such report shall be provided by the Secretary to any
person upon request.
45-937 O - 79 - 12
178
(c) Any person requesting a copy of a report may be required to
pay a reasonable fee to cover the cost of reproduction or mailing of
such report, excluding any salary of any employee involved in such
reproduction or mailing. A copy of such report may be furnished
without charge or at a reduced charge if it is determined by the Clerk
or Secretary that waiver or reduction of the fee is in the public inter-
est because furnishing the information may be considered as primarily
benefiting the public.
(d) Any report filed under this title with the Clerk or Secretary
shall be available to the public for a period of six years after receipt
of the report. After such six-year period the report shall be destroyed
unless needed in an ongoing investigation, except that in the case of
an individual who filed the report pursuant to section 101(d) and was
not subsequently elected; such reports shall be destroyed one year
after the individual is no longer a candidate for election to the office
of Member unless needed in an ongoing investigation.
(e) (1) It shall be unlawful for any person to ootain or use a r:port — ■
(A) for any unlawful purpose;
(B) for any commercial purpose other than by news and com-
munications media for dissemination to the general public;
(C) for determining or establishing the credit rating of any
individual; or
(D) for use, directly or indirectly, in the solicitation of money
for any political, charitable, or other purpose.
(2) The Attorney General may bring a civil action against any
person who obtains or uses a report for any purpose prohibited in
paragraph (1). The court in which such action is brought may assess
against such person a penalty in any amount not to exceed $5,000.
Such remedy shall be in addition to any other remedy available under
statutory or common law.
REVIEW AND COMPLIANCE PROCEDURES
Sec. 105. (a) The designated committee of the House of Repre-
sentatives and the designated committee of the Senate shall establish
procedures for the review of reports sent to them under section 103
(d)(1) and section 103(d)(2) to determine whether the reports are
filed in a timely manner, are complete, and are in proper form. In the
event a determination is made that a report is not so filed, the appro-
priate committee shall so inform the reporting individual and direct
him to take all necessary corrective action.
(b) In order to carry out their responsibilities under this title the
designated committee of the House of Representatives and the desig-
nated committee of the Senate have power, within their respective
jurisdictions, to render any advisory opinion interpreting this title, in
writing, to persons covered by this title. Notwithstanding any other
provisions of law, the individual to whom a public advisory opinion
is rendered in accordance with this subsection, and any other indi-
vidual covered by this title who is involved in a fact situation which
is indistinguishable in all material aspects, and who, after the issuance
of the advisory opinion, acts in good faith in accordance with the pro-
visions and findings of such advisory opinion shall not, as a result of
such act, be subject to any sanction provided in this title.
179
FAILURE TO FILE OR FALSIFYING REPORTS
Sec. 106. The Attorney General may bring a civil action in any
appropriate United States District Court against any individual who
knowingly and willfully falsifies or who knowingly and willfully fails
to file or report any information that such individual is required to
report pursuant to section 102. The court in which such action is
brought may assess against such individual a civil penalty in any
amount not to exceed $5,000. No action may be brought under this
section against any individual with respect to a report filed by such
individual in calendar year 1978 pursuant to section 101(d).
DEFINITIONS
Sec. 107. For the purposes of this title, the term —
(1) "income" means all income from whatever source derived,
including but not limited to the following items: compensation
for services, including fees, commissions, and similar items; net
and gross income derived from business; gains derived from
dealings in property; interest; rents; royalties; dividends; annu-
ities; income from life insurance and endowment contracts;
pensions; income from discharge of indebtedness; distributive
share of partnership income; and income from an interest in an
estate or trust;
(2) "relative" means an individual who is related to the report-
ing individual, as father, mother, son, daughter, brother, sister,
uncle, aunt, great aunt, great uncle, first cousin, nephew, niece,
husband, wife, grandfather, grandmother, grandson, grand-
daughter, father-in-law, mother-in-law, son-in-law, daughter-in-
law, brother-in-law, sister-in-law, stepfather, stepmother,
stepson, stepdaughter, stepbrother, stepsister, half brother, half
sister, or who is the grandfather or grandmother of the spouse of
the reporting individual, and shall be deemed to include the
fiance or fiancee of the reporting individual;
(3) "gift" means a payment, advance, forbearance, rendering,
or deposit of money, or any thing of value, unless consideration
of equal or greater value is received by the donor, but does not
include —
(A) bequest and other forms of inheritance ;
(B) suitable mementos of a function honoring the report-
ing individual;
(C) food, lodging, transportation, and entertainment
provided by State and local governments, or political sub-
divisions thereof, by a foreign government within a foreign
country, or by the United States Government;
(D) food and beverages consumed at banquets, receptions,
or similar events;
(E) consumable products provided by home-State busi-
nesses to a Member's office for distribution; or
(F) communications to the offices of a reporting individual
including subscriptions to newspapers and periodicals;
(4) "honoraria" has the meaning given such term in the Federal
Election Campaign Act of 1971;
180
(5) "value" means a good faith estimate of the dollar value if
the exact value is neither known nor easily obtainable by the
reporting individual ;
(6) "personal hospitality of any individual" means hospitality
extended for a nonbusiness purpose by an individual, not a
corporation or organisation, at the personal residence of that
individual or his family or on property or facilities owned by
that individual or his family;
(7) "dependent child" means, when used with respect to any
reporting individual, any individual who is a son, daughter,
stepson, or stepdaughter and who —
(A) is unmarried and under age 21 and is living in the
household of such reporting individual ; or
(B) is a dependent of such reporting individual within
the meaning of section 152 of the Internal Revenue Code
of 1954;
(8) "reimbursement" means any payment or other thing of
value received by the reporting individual, other than gifts, to
cover travel-related expenses of such individual other than those
which are —
(A) provided by the United States Government, the Dis-
trict of Columbia, or any State or political subdivision
thereof;
(B) required to be reported by the reporting individual
under section 7342 of title 5, United States Code; or
(C) required to be reported under section 304 of the Fed-
eral Election Campaign Act of 1971 (2 U.S.C. 434);
(9) "candidate" means an individual, other than a Member,
who seeks nomination for election, or election, to the Congress
whether or not such individual is elected, and for purposes of
this paragraph, an individual shall be deemed to seek nomina-
tion for election, or election, (A) if he has taken the action neces-
sary under the law of a State to qualify himself for nomination
for election, or election, or (B) if he or his principal campaign
committee has taken action to register or file campaign reports
required by section 304(a) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 434(a));
(10) "Clerk" means the Clerk of the House of Representatives;
(11) "Secretary" means the Secretary of the Senate;
(12) "Member" means a United States Senator, a Representa-
tive in Congress, a Delegate to Congress, or the Resident Commis-
sioner from Puerto Rico ;
(13) "election" means (A) a general, special, primary, or run-
off election, or (B) a convention or caucus of a political party
which has authority to nominate a candidate;
(14) "officer or employee of the House" means any individual,
other than a Member, whose compensation is disbursed by the
Clerk;
(15) "officer or employee of the Senate" means an individual,
other than a Senator or the Vice President, whose compensation
is disbursed by the Secretary; and
(16) "designated committee of the House of Representatives
and designated committee of the Senate" means the committee of
the House or Senate, as the case may be, assigned responsibility
for administering the reporting requirements of this title.
181
OTHER LAWS
Sec. 108. The provisions added by this title, and the regulations
issued thereunder, shall supersede and preempt any State or local law
with respect to financial disclosure by reason of candidacy for Federal
office or employment by the United States Government.
GENERAL ACCOUNTING OFFICE STUDY
Sec. 109. (a) Before November 30, 1980, and regularly thereafter,
the Comptroller General of the United States shall conduct a study
to determine whether this title is being carried out effectively and
whether timely and accurate reports are being filed by individuals
subject to this title.
(b) Within thirty days after completion of the study, the Comp-
troller General shall transmit a report to each House of Congress
containing a detailed statement of his findings and conclusions, to-
gether with his recommendations for such legislative and adminis-
trative actions as he deems appropriate. The first such study shall
include the Comptroller General's findings and recommendations on
the feasibility and potential need for a requirement that systematic
random audits be conducted of financial disclosure reports filed under
this title, including a thorough discussion of the type and nature of
audits that might be conducted; the personnel and other costs of
audits; the value of an audit to Members, the appropriate House and
Senate committees, and the public; and, if conducted, whether a gov-
ernmental or nongovernmental unit should perform^the audits, and
under whose supervision.
11. 5 U.S.C. sec. 557(d)
§557. Initial decisions; conclusiveness; review by agency; submissions by
parties; contents of decisions; record
(a) This section applies, according to the provisions thereof, when
a hearing is required to be conducted in accordance with section 556
of this title.
(d)(1) In any agency proceeding which is subject to subsection (a)
of this section, except to the extent required for the disposition of ex
parte matters as authorized by law —
(A) no interested person outside the agency shall make or
knowingly cause to be made to any member of the body compris-
ing the agency, administrative law judge, or other employee who
is or may reasonably be expected to be involved in the decisional
process of the proceeding, an ex parte communication relevant
to the merits of the proceeding;
(B) no member oi the body comprising the agency, adminis-
trative law judge, or other employee who is or may reasonably
be expected to be involved in the decisional process of the pro-
ceeding, shall make or knowingly cause to be made to any inter-
ested person outside the agency an ex parte communication rel-
evant to the merits of the proceeding;
(C) a member of the body comprising the agency, administra-
tive law judge, or other employee who is or may reasonably be
expected to be involved in the decisional process of such pro-
ceeding who receives, or who makes or knowingly causes to be
182
made, a communication prohibited by this subsection shall place
on the public record of the proceeding:
(i) all such written communications;
(ii) memoranda stating the substance of all such oral
communications; and
(iii) all written responses, and memoranda stating the
substance of all oral responses, to the materials described
in clauses (i) and (ii) of this subparagraph ;
(D) upon receipt of a communication knowingly made or
knowingly caused to be made by a party in violation of this
subsection, the agency, administrative law judge, or other em-
ployee presiding at the hearing may, to the extent consistent
with the interests of justice and the policy of the underlying
statutes, require the party to show cause why his claim or in-
terest in the proceeding should not be dismissed, denied, disre-
garded, or otherwise adversely affected on account of such
violation; and
(E) the prohibitions of this subsection shall apply beginning
at such time as the agency may designate, but in no case shall
they begin to apply later than the time at which a proceeding is
noticed for hearing unless the person responsible for the com-
munication has knowledge that it will be noticed, in which case
the prohibitions shall apply beginning at the time of his acqui-
sition of such knowledge.
(2) This subsection does not constitute authority to withhold in-
formation from Congress.
(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 387; Pub. L. 94-409, § 4(a),
Sept. 13, 1976, 90 Stat. 1246.)
12. 5 U.S.C. sec. 3110
§3110. Employment of relatives; restrictions
(a) For thejpurpose of this section —
(1) "agency" means —
(A) an Executive agency;
(B) an office, agency, or other establishment in the leg-
islative branch;
(C) an office, agency, or other establishment in the judicial
branch; and
(D) the government of the District of Columbia;
(2) "public official" means an officer (including the President
and a Member of Congress), a member of the uniformed service,
an employee and any other individual, in whom is vested the
authority by law, rule, or regulation, or to whom the authority
has been delegated, to appoint, employ, promote, or advance
individuals, or to recommend individuals for appointment, em-
ployment, promotion, or advancement, in connection with em-
ployment in an agency; and
(3) "relative" means, with respect to a public official, an
individual who is related to the public official as father, mother,
son, daughter, brother, sister, uncle, aunt, first cousin, nephew,
niece, husband, wife, father-in-law, mother-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, stepfather, step-
mother, stepson, stepdaughter, stepbrother, stepsister, half
brother, or half sister.
183
(b) A public official may not appoint, employ, promote, advance,
or advocate for appointment, employment, promotion, or advance-
ment, in or to a civilian position in the agency in which he is serving
•or over which he exercises jurisdiction or control any individual who
is a relative of the public official. An individual may not be appointed,
emplo}'ed, promoted, or advanced in or to a civilian position in an
agency if such appointment, employment, promotion, or advancement
has been advocated by a public official, serving in or exercising juris-
diction or control over the agency, who is a relative of the individual.
(c) An individual appointed, employed, promoted, or advanced in
violation of this section is not entitled to pay, and money may not be
paid from the Treasury as pay to an individual so appointed, employed,
promoted, or advanced.
(d) The Civil Service Commission may prescribe regulations author-
izing the temporary employment, in the event of emergencies resulting
from natural disasters or similar unforeseen events or circumstances,
of individuals whose employment would otherwise be prohibited by
this section.
(e) This section shall not be construed to prohibit the appointment
of an individual who is a preference eligible in any case in which the
passing over of that individual on a certificate of eligibles furnished
under section 3317(a) of this title will result in the selection for appoint-
ment of an individual who is not a preference eligible.
(Added Pub. L. 90-206, Title II, § 221(a), Dec. 16, 1967, 81 Stat.
640.)
13. 5 U.S.C. sec. 3303
-§3303. Competitive service; recommendations of Senators or Representatives
An individual concerned in examining an applicant for or appoint-
ing him in the competitive service may not receive or consider a rec-
ommendation of the applicant by a Senator or Representative,
except as to the character or residence of the applicant.
(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 418.)
14. 5 U.S.C. sec. 5533
■§5533. Dual pay from more than one position; limitations; exceptions
(a) Except as provided by subsections (b), (c), and (d) of this sec-
tion, an individual is not entitled to receive basic pay from more than
one position for more than an aggregate of 40 hours of work in one
calendar week (Sunday through Saturday).
(b) Except as otherwise provided bj r subsection (c) of this section,
the Civil Service Commission, subject to the supervision and control
of the President, may prescribe regulations under which exceptions
may be made to the restrictions in subsection (a) of this section when
appropriate authority determines that the exceptions are warranted
because personal services otherwise cannot be readily obtained.
(c)(1) Except as provided by paragraph (2) of this subsection,
unless otherwise authorized by law, appropriated funds are not avail-
able for payment to an individual or pay from more than one position
if the aggregate amount of the basic pay from the positions exceeds
$2,000 a year, and if —
(A) the pay of one of the positions is paid by the Clerk of
the House of Representatives (in the case of employees receiving
basic rates of compensation) ; or
184
(B) one of the positions is under the Office of the Architect
of the Capitol.
(2) Unless otherwise authorized by law, appropriated funds are
not available for payment to an individual of pay from more than
one position if the aggregate (gross) compensation from the positions
exceeds $5,987 a year, and if the pay of one of the positions is paid
by the Secretary of the Senate or the Clerk of the House of Repre-
sentatives (in the case of employees receiving single per annum rates
of compensation) .
(d) Subsection (a) of this section does not apply to —
(1) pay on a when-actually-employed basis received from more
than one consultant or expert position if the pay is not received
for the same hours of the same day;
(2) pay consisting of fees paid on other than a time basis;
(3) pay received by a teacher of the public schools of the Dis-
trict of Columbia for employment in a position during the summer
vacation period ;
(4) pay paid by the Tennessee Valley Authority to an employee
performing part-time or intermittent work in addition to his nor-
mal duties when the Authority considers it to be in the interest
of efficiency and economy;
(5) pay received by an individual holding a position —
(A) the pay of which is paid by the Secretary of the Senate
or the Clerk of the House of Representatives; or
(B) under the Architect of the Capitol ;
(6) pay paid by the United States Coast Guard to an employee
occupying a part-time position of lamplighter; and
(7) pay within the purview of any of the following statutes:
(A) section 162 of title 2;
(B) section 23(b) of title 13;
(C) section 327 of title 15;
(D) section 907 of title 20 ;
(E) section 873 of title 33 ;
(F) section 3335 (a) or (c) of title 39;
(G) section 631 or 631a of title 31, District of Columbia
Code; or
(H) section 102 of title 2, Canal Zone Code.
(e) This section does not apply to an individual employed under
sections 174J-1 to 174J-7 or 174k of title 40.
(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 483; Pub. L. 90-57, § 105(h),
July 28, 1967, 81 Stat. 143.)
15. 5 U.S.C. sec. 7342
"§7342. Receipt and disposition of foreign gifts and decorations
<f (a) For the purpose of this section —
"(1) 'employee' means —
"(A) an employee as defined by section 2105 of this title
and an officer or employee of the United States Postal Service
or of the Postal Rate Commission ;
"(B) an expert or consultant who is under contract under
section 3109 of this title with the United States or any agency,
department, or establishment thereof, including, in the case
of an organization performing services under such section,
any individual involved in the performance of such services;
185
"(C) an individual employed by, or occupying an office or
position in, the government of a territory or possession of the
United States or the government of the District of Columbia;
"(D) a member of a uniformed service;
"(E) the President and the Vice President;
"(F) a Member of Congress as defined by section 2106 of
this title (except the Vice President) and any Delegate to the
Congress; and
"(G) the spouse of an individual described in subpara-
graphs (A) through (F) (unless such individual and his or
her spouse are separated) or a dependent (within the mean-
ing of section 152 of the Internal Revenue Code of 1954)
of such an individual, other than a spouse or dependent who
is an employee under subparagraphs (A) through (F) ;
"(2) 'foreign government' means —
"(A) any unit of foreign governmental authority, includ-
ing any foreign national, State, local, and municipal govern-
ment ;
"(B) any international or multinational organization
whose membership is composed of any unit of foreign govern-
ment described in subparagraph (A) ; and
"(C) any agent or representative of any such unit or
such organization, while acting as such;
"(3) 'gift' means a tangible or intangible present (other than
a decoration) tendered by, or received from, a foreign govern-
ment;
"(4) 'decoration' means an order, device, medal, badge, insig-
nia, emblem, or award tendered by, or received from, a foreign
government ;
"(5) 'minimal value' means a retail value in the United States
at the time of acceptance of $100 or less, except that —
"(A) on January 1, 1981, and at 3 year intervals there-
after, 'minimal value' shall be redefined in regulations
prescribed by the Administrator of General Services, in
consultation with the Secretary of State, to reflect changes in
the consumer price index for the immediately preceding
8-year period ; and
"(B) regulations of an employing agency may define
'minimal value' for its employees to be less than the value
established under this paragraph; and
"(6) 'employing agency' means —
"(A) the Committee on Standards of Official Conduct of
the House of Representatives, for Members and employees
of the House of Representatives, except that those respon-
sibilities specified in subsections (c)(2)(A), e(l), and (g)(2)
(B) shall be carried out by the Clerk of the House;
"(B) the Select Committee on Ethics of the Senate, for
Senators and employees of the Senate; except that those
responsibilities (other than responsibilities involving approval
of the employing agency) specified in subsections (c)(2), (d)
and (g)(2)(B) shall be carried out by the Secretary of the
Senate;
"(C) the Administrative Office of the United States
Courts, for judges and judicial branch employees; and
"(D) the department, agency, office, or other entity in
which an employee is employed, for other legislative branch
employees and for all executive branch employees.
186
"(b) An employee may not —
"(I) request or otherwise encourage the tender of a gift or
decoration; or
"(2) accept a gift or decoration, other than in accordance with
the provisions of subsections (c) and (d).
"(c) (1) The Congress consents to —
"(A) the accepting and retaining by an employee of a gift of
minimal value tendered and received as a souvenir or mark of
courtesy; and
"(B) the accepting by an employee of a gift of more than
minimal value when such gift is in the nature of an educational
scholarship or medical treatment or when it appears that to
refuse the gift would likely cause offense or embarrrassment or
otherwise adversely affect the foreign relations of the United
States, except that —
"(i) a tangible gift of more than minimal value is deemed
to have been accepted on behalf of the United States and,
upon acceptance, shall become the property of the United
States; and
"(ii) an employee may accept gifts of travel or expenses for
travel taking place entirely outside the United States (such
as transportation, food, and lodging) of more than minimal
value if such acceptance is appropriate, consistent with the
interests of the United States, and permitted by the employ-
ing agency and any regulations which may be prescribed by
the employing agency.
"(2) Within 60 days after accepting a tangible gift of more than
minimal value (other than a gift described in paragraph (l)(B)(ii)),
an employee shall —
"(A) deposit the gift for disposal with his or her employing
agency; or
"(B) subject to the approval of the employing agency deposit
the gift with that agency for official use.
Within 30 days after terminating the official use of a gift under sub-
paragraph (B), the employing agency shall forward the gift to the
Administrator of General Services in accordance with subsection (e) (1)
or provide for its disposal in accordance with subsection (e)(2).
(3) When an employee deposits a gift of more than minimal
value for disposal or for official use pursuant to paragraph (2), or
within 30 days after accepting travel or travel expenses as provided in
paragraph (])(B)(ii) unless such travel or travel expenses are ac-
cepted in accordance with specific instructions of his or her employing
agency, the employee shall file a statement with his or her employing
agency or its delegate containing the information prescribed in sub-
section (f) for that gift.
"(d) The Congress consents to the accepting, retaining, and wear-
ing by an employee of a decoration tendered in recognition of active
field service in time of combat operations or awarded for other out-
standing or unusually meritorious performance, subject to the approval
of the employing agency of such employee. Without this approval, the
decoration is deemed to have been accepted on behalf of the United
States, shall become the property of the United States, and shall be
deposited by the employee, within sixty days of acceptance, with the
employing agency for official use, for forwarding to the Administrator
of General Services for disposal in accordance with subsection (e)(1),
or for disposal in accordance with subsection (e)(2). . .
187
"(e)(1) Except as provided in paragraph (2), gifts and decorations
that have been deposited with an employing agency for disposal shall
be (A) returned to the donor, or (B) forwarded to the Administrator
of General Services for transfer, donation, or other disposal in accord-
ance with the provisions of the Federal Property and Administrative
Services Act of 1949. However, no gift or decoration that has been
deposited for disposal may be sold without the approval of the Secre-
tary of State, upon a determination that the sale will not adversely
affect the foreign relations of the United States. Gifts and decorations
may be sold by negotiated sale.
"(2) Gifts and decorations received by a Senator or an employee of
the Senate that are deposited with the Secretary of the Senate for dis-
posal, or are deposited for an official use which has terminated, shall be
disposed of by the Commission on Arts and Antiquities of the United
States Senate. Any such gift or decoration may be returned by the
Commission to the donor or may be transferred or donated by the
Commission, subject to such terms and conditions as it may prescribe,
(A) to an agency or instrumentality of (i) the United States, (ii) a
State, territory, or possession of the United States, or a political sub-
division of the foregoing, or (iii) the District of Columbia, or (B) to
an organization described in section 501(c)(3) of the Internal Reve-
nue Code of 1954 which is exempt from taxation under section 501(a)
of such Code. Any such gift or decoration not disposed of as provided
in the preceding sentence shall be forwarded to the Administrator of
General Services for disposal in accordance with paragraph (1). If the
Administrator does not dispose of such gift or decoration within one
year, he shall, at the request of the Commission, return it to the Com-
mission and the Commission may dispose of such gift or decoration in
such manner as it considers proper, except that such gift or decoration
may be sold only with the approval of the Secretary of State upon a
determination that the sale will not adversely affect the foreign rela-
tions of the United States."
"(f) (1) Not later than January 31 of each year, each employing
agency or its delegate shall compile a listing of all statements filed
during the preceding year by the employees of that agency pursuant
to subsection (c) (3) and shall transmit such listing to the Secretary
of State who shall publish a comprehensive listing of all such state-
ments in the Federal Register.
"(2) Such listings shall include for each tangible gift reported — ■
"(A) the name and position of the emploj^ee;
"(B) a brief description of the gift and the circumstances
justifying acceptance;
"(C) the identity, if known, of the foreign government and the
name and position of the individual who presented the gift;
"(D) the date of acceptance of the gift;
"(E) the estimated value in the United States of the gift at the
time of acceptance; and
"(F) disposition or current location of the gift.
"(3) Such listing-s shall include for each gift of travel or travel
expenses —
"(A) the name and position of the employee;
"(B) a brief description of the gift and the circumstances
justifying acceptance; and
188
"(C) the identity, if known, of the foreign government and the
I name and position of the individual who presented the gift.
"(4) In transmitting such listings for the Central Intelligence
Agency, the Director of Central Intelligence may delete the informa-
tion described in subparagraphs (A) and (C) of paragraphs (2) and
(3) if the Director certifies in writing to the Secretary of State that
the publication of such information could adversely affect United
States intelligence sources.
"(g)(1) Each employing agency shall prescribe such regulations as
may be necessary to carry out the purpose of this section. For all
employing agencies in the executive branch, such regulations shall be
prescribed pursuant to guidance provided by the Secretary of State.
These regulations shall be implemented by each employing agency for
its employees.
"(2) Each employing agency shall —
"(A) report to the Attorney General cases in which there is
reason to believe that an employee has violated this section;
"(B) establish a procedure for obtaining an appraisal, when
necessary, of the value of gifts; and
"(C) take any other actions necessary to carry out the purpose
of this section.
"(h) The Attorney General may bring a civil action in any district
court of the United States against any employee who knowingly
solicits or accepts a gift from a foreign government not consented to
by this section or who fails to deposit or report such gift as required
by this section. The court in which such action is brought may assess a
penalty against such employee in any amount not to exceed the retail
value of the gift improperly solicited or received plus $5,000.
"(i) The President shall direct all Chiefs of a United States Diplo-
matic Mission to inform their host governments that it is a general
policy of the United States Government to prohibit United States
Government employees from receiving gifts or decorations of more
than minimal value.
"(j) Nothing in this section shall be construed to derogate any regu-
lation prescribed by any employing agency which provides for more
stringent limitations on the receipt of gifts and decorations by its
employees.
"(k) The provisions of this section do not apply to grants and other
forms of assistance to which section 108A of the Mutual Educational
and Cultural Exchange Act of 1961 applies.".
(2) The amendment made by paragraph (1) of this subsection
shall take effect on January 1, 1978.
(b)(1) After September 30, 1977, no appropriated funds, other than
funds from the "Emergencies in the Diplomatic and Consular Service"
account of the Department of State, may be used to purchase any
tangible gift of more than minimal value (as defined in section 7342 (a)
(5) of title 5, United States Code) for any foreign individual unless
such gift has been approved by the Congress.
(2) Beginning October 1, 1977, the Secretary of State shall annually
transmit to the Speaker of the House of Representatives and the
chairman of the Committee on Foreign Relations of the Senate a
report containing details on (1) any gifts of more than minimal value
purchased with appropriated funds which were given to a foreign
189
individual during the previous fiscal year, and (2) any other gifts
of more than minimal value given by the United States Government
to a foreign individual which were not obtained using appropriated
funds.
(Approved Aug. 17, 1977 amended Pub. L. 95-426, Oct. 7, 1978)
16. 18 U.S.C. sec. 201
§201. Bribery of public officials and witnesses
(a) For the purpose of this section —
"public official" means Member of Congress, or Resident
Commissioner, either before or after he has qualified, or an of-
• ficer or employee or person acting for or on behalf of the United
States, or any department, agency or branch of Government
thereof, including the District of Columbia, in any official func-
tion, under or by authority of any such department, agency, or
branch of Government, or a juror; and
"person who has been selected to be a public official" means
any person who has been nominated or appointed to be a public
official, or has been officially informed that he will be so nomi-
nated or appointed; and
"official act" means any decision or action on any question,
matter, cause, suit, proceeding or controversy, which may at
any time be pending, or which may by law be brought before
any public official, in his official capacity, or in his place of
trust or profit.
(b) Whoever, directly or indirectly, corruptly gives, offers or promises
anything of value to any public official or person who has been
selected to be a public official, or offers or promises any public official
or any person who has been selected to be a public official to give
anything of value to any other person or entity, with intent —
(1) to influence any official act; or
(2) to influence such public official or person who has been
selected to be a public official to commit or aid in committing,
or collude in, or allow, any fraud, or make opportunity for the
commission of any fraud, on the United States; or
(3) to induce such public official or such person who has
been selected to be a public official to do or omit to do any act
in violation of his lawful duty, or
(c) Whoever, being a public official or person selected to be a public
official, directly or indirectly, corruptly asks, demands, exacts, solicits,
seeks, accepts, receives, or agrees to receive anything of value for
himself or for any other person or entity, in return for:
(1) being influenced in his performance of any official act; or
(2) being, influenced to commit or aid in committing, or to
collude in, or allow, any fraud, or make opportunity for the
commission of any fraud, on the United States; or
(3) being induced to do or omit to do any act in violation of
his official duty; or
(d) Whoever, directly or indirectly, corruptly gives, offers, or
promises anything of value to any person, or offers or promises
such person to give anything of value to any other person or entity,
with intent to influence the testimony under oath or affirmation of
45-937 O - 79 - 13
190
such first-mentioned person as a witness upon a trial, hearing, or
other proceeding, before any court, any committee of either House
or both Houses of Congress, or any agency, commission, or officer
authorized by the laws of the United States to hear evidence or take
testimony, or with intent to influence such person to absent himself
therefrom; or
(e) Whoever, directly or indirectly, corruptly asks, demands, ex-
acts, solicits, seeks, accepts, receives, or agrees to receive anything of
value for himself or for any other person or entity in return for being
influenced in his testimony under oath or affirmation as a witness
upon any such trial, hearing, or other proceeding, or in return for
absenting himself therefrom —
Shall be fined not more than $20,000 or three times the mone-
tary equivalent of the thing of value, whichever is greater, or
imprisoned for not more than fifteen years, or both, and may be
disqualified from holding any office of honor, trust, or profit under
the United States.
(f) Whoever, otherwise than as provided by law for the proper
discharge of official duty, directly or indirectly gives, offers, or prom-
ises anything of value to any public official, former public official, or
person selected to be a public official, for or because of any official act
performed or to be performed by such public official, former public
official, or person selected to be a public official; or
(g) Whoever, being a public official, former public official, or person
selected to be a public official, otherwise than as provided by law for
the proper discharge of official duty, directly or indirectly asks, de-
mands, exacts, solicits, seeks, accepts, receives, or agrees to receive
anything of value for himself for or because of any official act per-
formed or to be performed by him ; or
(h) Whoever, directly or indirectly, gives, offers, or promises any-
thing of value to any person, for or because of the testimony under
oath or affirmation given or to be given by such person as a witness
upon a trial, hearing, or other proceeding, before any court, any com-
mittee of either House or both Houses of Congress, or any agency,
commission, or officer authorized by the laws of the United States to
hear evidence or take testimony, or for or because of his absence
therefrom; or
(i) Whoever, directly or indirectly, asks, demands, exacts, solicits,
seeks, accepts, receives, or agrees to receive anything of value for
himself for or because of the testimony under oath or affirmation
given or to be given by him as a witness upon any such trial, hear-
ing, or other proceeding, or for or because of his absence therefrom —
Shall be fined not more than $10,000 or imprisoned for not more
than two years, or both.
(j) Subsections (d), (e), (h), and (i) shall not be construed to pro-
hibit the payment or receipt of witness fees provided by law, or the
payment, by the party upon whose behalf a witness is called and
receipt by a witness, of the reasonable cost of travel and subsistence
incurred and the reasonable value of time lost in attendance at any
such trial, hearing, or proceeding, or in the case of expert witnesses,
involving a technical or professional opinion, a reasonable fee for time
spent in the preparation of such opinion, and in appearing and
testifying.
191
(k) The offenses and penalties prescribed in this section are separate
from and in addition to those prescribed in sections 1503, 1504, and
1505 of this title.
(Added Pub. L. 87-849, § 1(a), Oct. 23, 1962, 76 Stat. 1121, and
amended Pub. L. 90-578, Title III, § 301(b), Oct. 17, 1968, 82 Stat.
1115.)
17. 18 U.S.C. sec. 203-204
§203. Compensation to Members of Congress, officers, and others in matters
affecting the Government
(a) Whoever, otherwise than as provided by law for the proper
discharge of official duties, directly or indirectly receives or agrees
to receive, or asks, demands, solicits, or seeks, any compensation for
any services rendered or to be rendered either by himself or an-
other —
(1) At a time when he is a Member of Congress, Member of
Congress Elect, Resident Commissioner, or Resident Commis-
sioner Elect; or
(2) At a time when he is an officer or employee of the United
States in the executive, legislative, or judicial branch of the
Government, or in any agency of the United States, including
the District of Columbia,
in relation to any proceeding, application, request for a ruling or
other determination, contract, claim, controversy, charge, accusation,
arrest, or other particular matter in which the United States is a
party or has a direct and substantial interest, before any depart-
ment, agency, court-martial, officer, or any civil, military, or naval
commission, or
(b) Whoever, knowingly, otherwise than as provided by law for
the proper discharge of official duties, directly or indirectly gives,
promises or offers any compensation for any such services rendered
or to be rendered at a time when the person to whom the compensa-
tion is given, promised, or offered, is or was such a Member, Com-
missioner, officer or employee —
Shall be fined not more than $10,000 or imprisoned for not
more than two years, or both; and shall be incapable of holding
any office of honor, trust, or profit under the United States.
(c) A special Government employee shall be subject to subsection
(a) only in relation to a particular matter involving a specific party
or parties (1) in which he has at any time participated personally
and substantially as a Government employee or as a special Govern-
ment employee through decision, approval, disapproval, recommen-
dation, the rendering of advice, investigation or otherwise, or (2)
which is pending in the department or agency of the Government in
which he is serving: Provided, That clause (2) shall not apply in
the case of a special Government employee who has served m such
department or agency no more than sixty days during the immedi-
ately preceding period of three hundred and sixty-five consecutive
days.
§204. Practice in Court of Claims by Members of Congress
Whoever, being a Member of Congress, Member of Congress Elect,
Resident Commissioner, or Resident Commissioner Elect, practices
192
in the Court of Claims, shall be fined not more than $10,000 or im-
prisoned for not more than two years, or both and shall be incapable
of holding any office of honor, trust, or profit under the United States*
Added Pub. L. 87-849, § 1(a), Oct. 23, 1962, 76 Stat. 1122.
18. 18 U.S.C. sec. 205
§205. Activities of officers and employees in claims against and other matters
affecting the Government
Whoever, being an officer or employee of the United States in the
executive, legislative, or judicial branch of the Government or in
any agency of the United States, including the District of Columbia,
otherwise than in the proper discharge of his official duties —
(1) acts as agent or attorney lor prosecuting any claim against
the United States, or receives any gratuity, or any share of or
interest in any such claim in consideration of assistance in the
prosecution of such claim, or
(2) acts as agent or attorney for anyone before any depart-
ment, agency, court, court-martial, officer, or any civil, military,
or naval commission in connection with any proceeding, appli-
•cation, request for a ruling or other determmation, contract,
•claim, controversy, charge, accusation, arrest, or other particu-
lar matter in which the United States is a party or has a direct
and substantial interest —
Shall be fined not more than $10,000 or imprisoned for not
more than two years, or both.
A special Government employee shall be subject to the preceding
paragraphs only in relation to a particular matter involving a spe-
cific party or parties (1) in which he has at any time participated
personally and substantially as a Government employee or as a spe-
cial Government employee through decision, approval, disapproval,
recommendation, the rendering of advice, investigation or otherwise,
or (2) which is pending in the department or agency of the Govern-
ment in which he is serving: Provided, That clause (2) shall not
apply in the case of a special Government employee who has served
in such department or agency no more than sixty days during the
immediately preceding period of three hundred and sixty-five con-
secutive days.
Nothing herein prevents an officer or employee, if not inconsist-
ent with the faithful performance of his duties, from acting with-
out compensation as agent or attorney for any person who is the
subject of disciplinary, loyalty, or other personnel administration
proceedings in connection with those proceedings.
Nothing herein or in section 203 prevents an officer or employee,
including a special Government employee, from acting, with or with-
out compensation, as agent or attorney for his parents, spouse,
child, or any person for whom, or for any estate for which, he is
serving as guardian, executor, administrator, trustee, or other per-
sonal fiduciary except in those matters in which he has participated
personally and substantially as a Government employee, through de-
cision, approval, disapproval, recommendation, the rendering of
advice, investigation, or otherwise, or which are the subject of his
193
official responsibility, provided that the Government official re-
sponsible for appointment to his position approves.
Nothing herein or in section 203 prevents a special Government
employee from acting as agent or attorney for another person in the
performance of work under a grant by, or a contract with or for the
benefit of, the United States provided that the head of the depart-
ment or agency concerned with the grant or contract shall certify in
writing that the national interest so requires.
Such certification shall be published in the Federal Register.
Nothing herein prevents an officer or employee from giving testi-
mony under oath or from making statements required to be made
under penalty for perjury or contempt.
(Added Pub. L. 87-849, § 1(a), Oct. 23, 1962, 76 Stat. 1122.)
19. 18 U.S.C. sec. 211
§211. Acceptance or solicitation to obtain appointive public office
Whoever solicits or receives, either as a political contribution, or
for personal emolument, any money or thing of value, in considera-
tion of the promise of support or use of influence in obtaining for i
any person any appointive office or place under the United States,
shall be fined not more than $1,000 or imprisoned not more than one
year, or both.
Whoever solicits or receives any thing of value in consideration of
aiding a person to obtain employment under the United States either
by referrmg his name to an executive department or agency of the
United States or by requiring the payment of a fee because such
person has secured such employment shall be fined not more than
$1,000, or imprisoned not more than one year, or both. This section
shall not apply to such services rendered by an employment agency
pursuant to the written request of an executive department or agency
of the United States.
(June 25, 1948, c. 645, 62 Stat. 694, § 211, formerly § 215, amended
Sept. 13, 1951, c. 380, 65 Stat. 320, and renumbered Oct. 23, 1962,
Pub. L. 87-849, § 1(b), 76 Stat. 1125.)
20. 18 U.S.C. sec. 286
§286. Conspiracy to defraud the Government with respect to claims
Whoever enters into any agreement, combination, or conspiracy to
defraud the United States, or any department or agency thereof, by
obtaining or aiding to obtain the payment or allowance of any false,
fictitious or fraudulent claim, shall be fined not more than $10,000
or imprisoned not more than ten years, or both.
(June 25, 1948, c. 645, 62 Stat. 698.)
21. 18 U.S.C. sec. 287 1
§287. False, fictitious or fraudulent claims
Whoever makes or presents to any person or officer in the civil;
military, or naval service of the United States, or to any department
or agency thereof, any claim upon or against the United States, or
any department or agency thereof, knowing such claim to be false,
194
fictitious, or fraudulent, shall be fined not more than $10,000 or im-
prisoned not more than five years, or both.
(June 25, 1948, c. 645, 62 Stat. 698.)
22. 18 U.S.C. sees. 431-433
§431. Contracts by Member of Congress
Whoever, being a Member of or Delegate to Congress, or a Resi-
dent Commissioner, either before or after he has qualified, directly
or indirectly, himself, or by any other person in trust for him, or
for his use or benefit, or on his account, undertakes, executes, holds,
or enjoys, in whole or in part, any contract or agreement, made or
entered into in behalf of the United States or any agency thereof,
by any officer or person authorized to make contracts on its behalf,
shall be fined not more than $3,000.
All contracts or agreements made in violation of this section shall
be void; and whenever any sum of money is advanced by the United
States or any agency thereof, in consideration of any such contract
or agreement, it shall forthwith be repaid; and in case of failure
or refusal to repay the same when remanded by the proper officer
of the department or agency under whose authority such contract
or agreement shall have been made or entered into, suit shall at once
be brought against the person so failing or refusing and his sureties
for the recovery of the money so advanced. June 25, 1948, c. 645,
62 Stat. 702; Oct. 31, 1951, c. 655, § 19, 65 Stat. 717.
§ 432. Officer or employee contracting with Member of Congress
Whoever, being an officer or employee of the United States, on
behalf of the United States or any agency thereof, directly or indi-
rectly makes or enters into any contract, bargain, or agreement, with
any Member of or Delegate to Congress, or any Resident Commis-
sioner, either before or after he has qualified, shall be fined not more
than $3,000. June 25, 1948, c. 645, 62 Stat. 702.
§433. Exemptions with respect to certain contracts
Sections 431 and 432 of this title shall not extend to any contract
or agreement made or entered into, or accepted by any incorporated
company for the general benefit of such corporation; nor to the pur-
chase or sale of bills of exchange or other property where the same
are ready for delivery and payment therefor is made at the time
of making or entering into the contract or agreement. Nor shall
the provisions of such sections apply to advances, loans, discounts,
purchase or repurchase agreements, extensions, or renewals thereof,
or acceptances, releases or substitutions of security thereof or other
contracts or agreements made or entered into under the Reconstruc-
tion Finance Corporation Act, the Agricultural Adjustment Act, the
Federal Farm Loan Act, the Emergency Farm Mortgage Act of 1933j
the Farm Credit Act of 1933, or the Home Owners Loan Act of 1933,-
the Farmers' Home Administration Act of 1946, the Bankhead-Jones
Farm Tenant Act, or to crop insurance agreements or contracts or
agreements of a kind which the Secretary of Agriculture may enter
into with farmers.
Any exemption permitted by this section shall be made a matter of
public record. June 25, 1948, c. 645, 62 Stat. 703; Oct. 4, 1961, Pub. L,
87-353, §3(o),75Stat. 774.
195
23. 18 U.S.C. sec. 597
§597. Expenditures to influence voting
Whoever makes or offers to make an expenditure to any person,
either to vote or withhold his vote, or to vote for or against any
candidate; and
Whoever solicits, accepts, or receives any such expenditure in
consideration of his vote or the withholding of his vote —
Shall be fined not more than $1,000 or imprisoned not more than
one year, or both; and if the violation was willful, shall be fined not
more than $10,000 or imprisoned not more than two years, or both.
(June 25, 1948, c. 645, 62 Stat. 721.)
24. 18 U.S.C. sec. 598 ,
§ 598. Coercion by means of relief appropriations
Whoever uses any part of any appropriation made by Congress
for work relief, relief, or for increasing employment by providing
loans and grants for public-works projects, or exercises or administers
any authority conferred by any Appropriation Act for the purpose of
interfering with, restraining, or coercing any individual in the exercise
of his right to vote at any election, shall be fined not more than $1,000
or imprisoned not more than one year, or both.
(June 25, 1948, c. 645, 62 Stat. 721.)
25. 18 U.S.C. sec. 599
§599. Promise of appointment by candidate
Whoever, being a candidate, directly or indirectly promises or
pledges the appointment, or the use of his influence or support for the
appointment of any person to any public or private position or em-
ployment, for the purpose of procuring support in his candidacy shall
be fined not more than $1,000 or imprisoned not more than one year,
or both; and if the violation was willful, shall be fined not more than
$10,000 or imprisoned not more than two years, or both.
(June 25, 1948, c. 645, 62 Stat. 721.)
26. 18 U.S.C. sec. 600
§600. Promise of employment or other benefit for political activity
Whoever, directly or indirectly, promises any employment, position,
compensation, contract, appointment, or other benefit, provided for or
made possible in whole or in part by any Act of Congress, or any
special consideration in obtaining any such benefit, to any person as
consideration, favor, or reward for any political activity or for the
support of or opposition to any candidate or any political party in
connection with any general or special election to any political office,
or in connection with any primary election or political convention or
caucus held to select candidates for any political office, shall be fined
not more than $10,000 or imprisoned not more than one year, or both.
(As amended Oct. 2, 1976, Pub. L. 94-453, § 3, 90 Stat. 1517.)
1976 Amendment: Pub. L. 94-453 substituted $10,000 for $1,000 maximum
allowable fine.
Legislative History: For legislative historv and purpose of Pub. L. 94-453, see
1976 U.S. Code Cong, and Adm. News, p. 2883.
196
27. 18 U.S.C. sec. 601
§601. Deprivation of employment or other benefit for political contribution
(a) Whoever, directly or indirectly, knowingly causes or attempts to
cause any person to make a contribution of a thing of value (including
services) for the benefit of any candidate or any political party, by
means of the denial or deprivation, or the threat of the denial or
deprivation, of —
(1) any employment, position, or work in or for any agency or
other entity of the Government of the United States, a State, or a
political subdivision of a State, or any compensation or benefit of
such employment, position, or work; or
(2) any payment or benefit of a program of the United States, a
State, or a political subdivision of a State;
if such employment, position, work, compensation, payment, or benefit
is provided for or made possible in whole or in part by an Act of Con-
gress, shall be fined not more than $10,000, or imprisoned not more
than one year, or both.
(b) As used in this section —
(1) the term "candidate" means an individual who seeks
nomination for election, or election, to Federal, State, or local
office, whether or not such individual is elected, and, for purposes
of this paragraph, an individual shall be deemed to seek nomina-
tion for election, or election, to Federal, State, or local office, if
he has (A) taken the action necessary under the law of a State to
qualify himself for nomination for election, or election, or (B)
received contributions or made expenditures, or has given his
consent for any other person to receive contributions or make
expenditures, with a view to bringing about his nomination for
election, or election, to such office;
(2) the term "election" means (A) a general, special primary, or
runoff election, (B) a convention or caucus of a political party held
to nominate a candidate, (C) a primary election held for the selec-
tion of delegates to a nominating convention of a political party,
(D) a primary election held for the expression of a preference for
the nomination of persons for election to the office of President,
and (E) the election of delegates to a constitutional convention
for proposing amendments to the Constitution of the United
States or of any State; and
(3) the term "State" means a State of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, or any
territory or possession of the United States.
(As amended Oct. 2, 1976, Pub. L. 94-453, § 1, 90 Stat. 1516.)
1976 Amendment: Pub. L. 94-453 eliminated provisions relating to deprivations
based upon race, creed, and color which are now set out in section 246 of this title,
replaced term political activity" with more precise terms and definitions, and
raised the amount of maximum fine from $1,000 to $10,000.
Legislative History: For legislative historv and purpose of Pub. L. 94-453, see
1976 U.S. Code Cong, and Adm. News, p. 2883.
28. 18 U.S.C. sec. 602
§602. Solicitation of political contributions
Whoever, being a Senator or Representative in, or Delegate or
Resident Commissioner to, or a candidate for Congress, or individual
197
elected as, Senator, Representative, Delegate, or Resident Commis-
sioner, or an officer or employee of the United States or any depart-
ment or agency thereof, or a person receiving any salary or compensa-
tion for services from money derived from the Treasury of the United
States, directly or indirectly solicits, receives, or is in any manner
concerned in soliciting or receiving, any assessment, subscription, or
contribution for any political purpose whatever, from any other such
officer, employee, or person, shall be fined not more than $5,000 or
imprisoned not more than three years or both.
(June 25, 1948, c. 645, 62 Stat. 722.)
29. 18 U.S.C. sec. 603
§603. Place of solicitation
Whoever, in any room or building occupied in the discharge of
official duties by any person mentioned in section 602 of this title, or
in any navy yard, fort, or arsenal, solicits or receives any contribu-
tion of money or other thing of value for any political purpose, shall
be fined not more than $5,000 or imprisoned not more than three
years, or both.
(June 25, 1948, c. 645, 62 Stat. 722; Oct. 31, 1951, c.655, § 20(b),
65 Stat. 718.)
30. 18 U.S.C. sec. 604
§ 604. Solicitation from persons on relief
Whoever solicits or receives or is in any manner concerned in
soliciting or receiving any assessment, subscription, or contribution
for any political purpose from any person known by him to be entitled
to, or receiving compensation, employment, or other benefit provided
for or made possible by any Act of Congress appropriating funds for
work relief or relief purposes, shall be fined not more than $1,000 or
imprisoned not more than one year, or both.
(June 25, 1948, c. 645, 62 Stat. 722.)
31. 18 U.S.C. sec. 605
§ 605. Disclosure of names of persons on relief
Whoever, for political purposes, furnishes or discloses any list
or names of persons receiving compensation, employment or bene-
fits provided for or made possible by any Act of Congress appro-
priating, or authorizing the appropriation of funds for work relief
or relief purposes, to a political candidate, committee, campaign
manager, or to any person for delivery to a political candidate, com-
mittee, or campaign manager; and
Whoever receives any such list or names for political purposes —
Shall be fined not more than $1,000 or imprisoned not more
than one year, or both.
(June 25, 1948, c. 645, 62 Stat. 722.)
32. 18 U.S.C. sec. 606
§606. Intimidation to secure political contributions
Whoever, being one of the officers or employees of the United
States mentioned in section 602 of this title, discharges, or promotes,
198
or degrades, or in any manner changes the official rank or compensa-
tion of any other officer or employee, or promises or threatens so to
do, for giving or withholding or neglecting to make any contribution
of money or other valuable thing for any polticial purpose, shall be
fined not more than $5,000 or imprisoned not more than three years,
or both.
(June 25, 1948, c. 645, 62 Stat. 722.)
33. 18 U.S.C. sec. 607
§607. Making political contributions
Whoever, being an officer, clerk, or other person in the service of
the United States or any department or agency thereof, directly or
indirectly gives or hands over to any other officer, clerk, or person
in the service of the United States, or to any Senator or Member of or
Delegate to Congress, or Resident Commissioner, any money or
other valuable thing on account of or to be applied to the promotion
of any political object, shall be fined not more than $5,000 or impris-
oned not more than three years, or both.
(June 25, 1948, c. 645, 62 Stat. 722.)
34. 18 U.S.C. sec. 641
§641. Public money, property or records
Whoever embezzles, steals, purloins, or knowingly converts to hi-
use or the use of another, or without authority, sells, conveys or dis
poses of any record, voucher, money, or thing of value of the United
States or of any department or agency thereof, or any property made
or being made under contract for the United States or any department
or agency thereof; or
Whoever receives, conceals, or retains the same with intent to con-
vert it to his use or gain, knowing it to have been embezzled, stolen,
purloined or converted —
Shall be fined not more than $10,000 or imprisoned not more
than ten years, or both; but if the value of such property does not
exceed the sum of $100, he shall be fined not more than $1,000 or
imprisoned not more than one year, or both.
The word "value" means face, par, or market value, or cost price,
either wholesale or retail, whichever is greater.
(June 25, 1948, c. 645, 62 Stat. 725.)
35. 18 U.S.C. sec. 1001
§1001. Statements or entries generally
Whoever, in any matter within the jurisdiction of any department
or agency of the United States knowingly and willfully falsifies, con-
ceals or covers up by any trick, scheme, or device a material fact,
or makes any false, fictitious or fraudulent statements or representa-
tions, or makes or uses any false writing or document knowing the
same to contain any false, fictitious or fraudulent statement or entry;
shall be fined not more than $10,000 or imprisoned not more than
five years, or both.
(June 25, 1948, c. 645, 62 Stat, 749.)
199
36. 18 U.S.C. sec. 1719
§1719. Franking pivilege
Whoever makes use of any official envelope, label, or indorsement
authorized by law, to avoid the payment of postage or registry fee on
his private letter, packet, package, or other matter in the mail, shall
be fined not more than $300.
(June 25, 1948, c. 645, 62 Stat. 783.)
37. 26 U.S.C. sections 4941 and 4946
§4941. Taxes on self -dealing
(a) Initial Taxes. —
(1) On self-dealer. — There is hereby imposed a tax on each
act of self-dealing between a disqualified person and a private
foundation. The rate of tax shall be equal to 5 percent of the
amount involved with respect to the act of self-dealing for each
year (or part thereof) in the taxable period. The tax imposed by
this paragraph shall be paid by any disqualified person (other than
a foundation manager acting only as such) who participates in
the act of self-dealing. In the case of a government official (as
defined in section 4946(c)), a tax shall be imposed by this para-
graph only if such disqualified person participates in the act of
self-dealing knowing that it is such an act.
(2) On foundation manager. — In any case in which a tax is
imposed by paragraph (1), there is hereby imposed on the par-
ticipation of any foundation manager in an act of self-dealing
between a disqualified person and a private foundation, knowing
that it is such an act, a tax equal to 2){ percent of the amount in-
volved with respect to the act of self-dealing for each year (or
part thereof) in the taxable period, unless such participation is
not willful and is due to reasonable cause. The tax imposed by
this paragraph shall be paid by any foundation manager who
participated in the act of self-dealing.
(b) Additional Taxes. —
(1) On self-dealer. — In any case in which an initial tax is
imposed by subsection (a) (1) on an act of self-dealing by a dis-
qualified person with a private foundation and the act is not cor-
rected within the correction period, there is hereby imposed a tax
equal to 200 percent of the amount involved. The tax imposed by
this paragraph shall be paid by any disqualified person (other
than a foundation manager acting only as such) who participated
in the act of self-dealing.
(2) On foundation manager. — In any case in which an ad-
tional tax is imposed by paragraph (1), if a foundation manager
refused to agree to part or all of the correction, there is hereby
imposed a tax equal to 50 percent of the amount involved. The
tax imposed by this paragraph shall be paid by any foundation
manager who refused to agree to part or all of the correction.
(c) Special Rules. — For purposes of subsections (a) and (b) —
(1) Joint and several liability. — If more than one person
is liable under any paragraph of subsection (a) or (b) with respect
200
to any one act of self-dealing, all such persons shall be jointly and
severally liable under such paragraph with respect to such act.
(2) $10,000 limit for management. — With respect to any one
act of self-dealing, the maximum amount of the tax imposed by
subsection (a)(2) shall not exceed $10,000, and the maximum
amount of the tax imposed by subsection (b) (2) shall not exceed
$10,000.
(d) Self-dealing. —
(1) In general. — For purposes of this section, the term
"self-dealing" means any direct or indirect —
(A) sale or exchange, or leasing, of property between a
private foundation and a disqualified person;
(B) lending of money or other extension of credit between
a private foundation and a disqualified person;
(C) furnishing of goods, services, or facilities between a
private foundation and a disqualified person;
(D) payment of compensation (or payment or reimburse-
ment of expenses) by a private foundation to a disqualified
person;
(E) transfer to, or use by or for the benefit of, a disquali-
fied person of the income or assets of a private foundation;
and
(F) agreement Jby a private foundation to make any pay-
ment of money of other property to a government official
(as defined in section 4946(c)), other than an agreement to
employ such individual for any period after the termination
of h's government service if such individual is terminatmg
his government service within a 90-day period.
(2) Special rules. — For purposes of paragraph (1) —
(A) the transfer of real or personal property by a dis-
qualified person to a private foundation shall be treated as
a sale or exchange if the property is subject to a mortage or
similar lien which the foundation assumes or if it is subject to
a mortgage or similar lien which a disqualified person placed
on the property within the 10-year period ending on the date
of the transfer;
(B) the lending of money by a disqualified person to a
private foundation shall not be an act of self-dealing if the
loan is without interest or other charge and if the proceeds
of the loan are used exclusively for purposes specified in sec-
tion 501(c)(3); t
(C) the furnishing of goods, services, or facilities by a
disqualified person to a private foundation shall not be an act
of self-dealing if the furnishing is without charge and if the
goods, services, or faculties so furnished are used exclusively
for purposes specified in section 501(c)(3);
(D) the furnishing of goods, services, or facilities by a
private foundation to a disqualified person shall not be an act
of self-dealing if such furnishing is made on a basis no more
favorable than that on which such goods, services, or facilities
are made available to the general public;
201
(E) except in the case of a government official (as defined
in section 4946(c)), the payment of compensation (and the
payment or reimbursement of expenses) by a private founda-
tion to a disqualified person for personal services which are
reasonable and necessary to carrying out the exempt purpose
of the private foundation shall not be an act of self-dealing
if the compensation (or payment or reimbursement) is not
excessive;
(F) any transaction between a private foundation and a
corporation which is a disqualified person (as defined in sect on
4946(a)), pursuant to any liquidation, merger, redemption,
recapitalization, or other corporate adjustment, organization,
or reorganization, shall not be an act of self-dealing if all of the
securities of the same class as that held by the foundation are
subject to the same terms and such terms provide for receipt
by the foundation of no less than fair market value ; and
(G) in the case of a government official (as defined in sec-
tion 4946(c)), paragraph (1) shall in addition not apply to —
(i) prizes and awards which are subject to the provi-
sions of section 74 (b) , if the recipients of such prizes and
awards are selected from the general public,
(ii) scholarships and fellowship grants which are sub-
ject to the provisions of section 117(a) and are to be used
for study at an educational organization described in sec-
tion 170 (b)(1) (A) (ii),
(iii) any annuity or other payment (forming part of
a stock-bonus, pension, or profit-sharing plan) by a trust
which is a qualified trust under section 401,
(iv) any annuity or other payment under a plan which
meets the requirements of section 404(a)(2),
(v) any contribution or gift (other than a contribution
or gift of money) to, or services or facilities made avail-
able to, any such individual, if the aggregate value of
such contributions, gifts, services, and facilities to, or
made available to, such individual during any calendar
year does not exceed $25,
(vi) any payment made under chapter 41 of title 5,
United States Code, or
(vii) any payment or reimbursement of traveling ex-
penses for travel solely from one point in the United
States to another point in the United States, but only if
such payment or reimbursement does not exceed the ac-
tual cost of the transportation involved plus as amount
for all other traveling expenses not in excess of 125 per-
cent of the maximum amount payable under section 5702
(a) of title 5, United States Code, for like travel by em-
ployees of tho United States.
(e) Other Definitions. — For purposes of this section —
(1) Taxable period. — The term "taxable period" means, with
respect to any act of self-dealing, the period beginning with the
date on which the act of self-dealing occurs and ending on which-
ever of the following is the earlier: (A) the date of mailing of a
notice of deficiency with respect to the tax imposed by subsection
(a)(1) under section 6212, or (B) the date on which correction
of the act of self-dealing is completed.
202
(2) Amount involved. — The term "amount involved" means,
with respect to any act of self-dealing, the greater of the amount
of money and the fair market value of the other property given or
the amount of money and the fair market value of the other prop-
erty received ; except that, in the case of services described in sub-
section (d) (2) (E) , the amount involved shall be only the excess
compensation. For purposes of the preceding sentence, the fair
market value —
(A) in the case of the taxes imposed by subsection (a),
shall be determined as of the date on which the act of self-
dealing occurs; and
(B) in the case of the taxes imposed by subsection (b), shall
be the highest fair market value during the correction period.
(3) Correction. — The terms "correction" and "correct" mean,
with respect to any act of self-dealing, undoing the transaction to
the extent possible, but in any case placing the private foundation
in a financial position not worse than that in which it would be if
the disqualified person were dealing under the highest fiduciary
standards.
(4) Correction period. — The term "correction period" means,
with respect to any act of self-dealing, the period beginning with
the date on which the act of self-dealing occurs and ending 90
days after the date of mailing of a notice of deficiency with respect
to the tax imposed by subsection (b)(1) under section 6212, ex-
tended by —
(A) any period in which a deficiency cannot be assessed
under section 6213(a), and
(B) any other period which the Secretary determines is rea-
sonable and necessary to bring about correction of the act of
self -dealing.
(Added Pub. L. 91-172, Title I, § 101 (b) , Dec. 30, 1969, 83 Stat. 499,
and amended Pub. L. 94-455, Title XIX, §§ 1901(b)(8)(H), 1906(b)
(13) (A), Oct. 4, 1976, 90 Stat. 1795, 1834.)
§4946. Definitions and special rules
(a) Disqualified Person. —
(1) In general. — For purposes of this chapter, the term "dis-
qualified person" means, with respect to a private foundation, a
person who is — .
(A) a substantial contributor to the foundation,
(B) a foundation manager (within the meaning of sub-
section (b) (1)),
(C) an owner of more than 20 percent of —
(i) the total combined voting power of a corporation,
(ii) the profits interest of a partnership, or
(iii) the beneficial interest of a trust or unincorporated
enterprise,
which is a substantial contributor to the foundation,
(D) a member of the family (as defined in subsection (d))
of any individual described in subparagraph (A), (B), or (C),
(E) a corporation of which persons described in subpara-
graph (A), (B), (C), or (D) own more than 35 percent of the
total combined voting power,
203
(F) a partnership in which persons described in subpara-
graph (A), (B), (C), or (D) own more than 35 percent of the
profits interest,
(G) a trust or estate in which persons described in sub-
paragraph (A), (B), (C), or (D) hold more than 35 percent
of the beneficial interest,
(H) only for purposes of section 4943, a private founda-
tion —
(i) which is effectively controlled (directly or indi-
rectly) by the same person or persons who control the
private foundation in question, or
(ii) substantially all of the contributions to which were
made (directly or indirectly) by the same person or per-
sons described in subparagraph (A) ,, (B) , or (C) , or mem-
bers of their families (within the meaning of subsection
(d)), who made (directly or indirectly) substantially all
of the contributions to the private foundation in ques-
tion, and
(I) only for purposes of section 4941, a government official
(as defined in subsection (c)).
(2) Substantial contributors. — For purposes of paragraph
(1), the term "substantial contributor" means a person who is
described in section 507 (d) (2) .
(3) Stockholdings. — For purposes of paragraphs (l)(C)(i) and
(1)(E), there shall be taken into account indirect stockholdings
which would be taken into account under section 267(c), except
that, for purposes of this paragraph, section 287(c)(4) shall be
treated as providing that the members of the family of an indi-
vidual are the members within the meaning of subsection (d) .
(4) Partnerships; trusts. — For purposes of paragraphs (1)(C)
(ii) and (iii), (1)(F), and (1)(G), the ownership of profits or
beneficial interests shall be determined in accordance with the
rules for constructive ownership of stock provided in section
267(c) (other than paragraph (3) thereof), except that section
267(c)(4) shall be treated as providing that the members of the
family of an individual are the members within the meaning of
subsection (d).
(b) Foundation Manager. — For purposes of this chapter, the term
"foundation manager" means, with respect to any private founda-
tion —
(1) an officer, director, or trustee of a foundation (or an indi-
vidual having powers or responsibilities similar to those of
officers, directors, or trustees of the foundation), and
(2) with respect to any act (or failure to act), the employees of
the foundation having authority or responsibility with respect to
such act (or failure to act) .
(c) Government Official. — For purposes of subsection (a)(1) (I)
and section 4941, the term "government official" means, with respect
to an act of self -dealing described in section 4941, an individual who,
at the time of such act, holds any of the following offices or positions
(other than as a "special Government employee," as defined in section
202(a) of title 18, United States Code):
(1) an elective public office in the executive or legislative branch
of the Government of the United States,
204
(2) an office in the executive or judicial branch of the Govern-
ment of the United States, appointment to which was made by
the President,
(3) a position in the executive, legislative, or judicial branch of
the Government of the United States —
(A) which is listed in schedule C of rule VI of the Civil
Service Rules, or
(B) the compensation for which is equal to or greater than
the lowest rate of compensation prescribed for GS-16 of the
General Schedule under section 5332 of title 5, United States
Code,
(4) a position under the House of Representatives or the Senate
of the United States held by an individual receiving gross com-
pensation at an annual rate of $15,000 or more,
(5) an elective or appointive public office in the executive, legis-
lative, or judicial branch of the government of a State, possession
of the United States, or political subdivision or other area of any
of the foregoing, or of the District of Columbia, held by an indi-
vidual receiving gross compensation at an annual rate of $15,000
or more, or
(6) a position as personal or executive assistant or secretary to
any of the foregoing.
(d) Members of Family. — For purposes of subsection (a)(1), the
family of any individual shall include only his spouse, ancestors, lineal
descendants, and spouses of lineal descendants.
(Added Pub. L. 91-172, Title I, § 101(b), Dec. 30, 1969, 83 Stat.
515.)
38. 31 U.S.C. sections 231-233
§231. Liability of persons making false claims
Any person not in the military or naval forces of the United States,
or in the militia called into or actually employed in the service of the
United States, who shall make or cause to be made, or present or cause
to be presented, for payment or approval, to or by any person or officer
in the civil, military, or naval service of the United States, any
claim upon or against the Government of the United States, or any
department or officer thereof, knowing such claim to be false, fictitious,
or fraudulent, or who, for the purpose of obtaining or aiding to obtain
the payment or approval of such claim, makes, uses, or causes to be
made or used, any false bill, receipt, voucher, roll, account, claim,
certificate, affidavit, or deposition, knowing the same to contain any
fraudulent or fictitious statement or entry, or who enters into any
agreement, combination, or conspiracy to defraud the Government of
the United States, or any department or officer thereof, by obtaining
or aiding to obtain the payment or allowance of any false or fraudu-
lent claim, or who, having charge, possession, custody, or control of
any money or other public property used or to be used in the military
or naval service, who, with intent to defraud the United States or will-
fully to conceal such money or other property, delivers or causes to be
delivered, to any other person having authority to receive the same,
any amount of such money or other property less than that for which
he received a certificate or took a receipt, and every person authorized
to make or deliver any certificate, voucher, receipt, or other paper cer-
tifying the receipt of arms, ammunition, provisions, clothing, or other
205
property so used or to be used, who makes or delivers the same to any
other person without a full knowledge of the truth of the facts stated
therein, and with intent to defraud the United States, and every per-
son who knowingly purchases or receives in pledge for any obligation
or indebtedness from any soldier, officer, sailor, or other person called
into or employed in the military or naval service any arms, equip-
ments, ammunition, clothes, military stores, or other public property,
such soldier, sailor, officer, or other person not having the lawful
right to pledge or sell the same, shall forfeit and pay to the United
States the sum of $2,000, and, in addition, double the amount of
damages which the United States may have sustained by reason of
the doing or committing such act, together with the costs of suit; and
such forfeiture and damages shall be sued for in the same suit.
§232. Same; suits; procedure
(A) The several district courts of the United States, the several dis-
trict courts of the Territories of the United States, within whose juris-
dictional limits the person doing or committing such act shall be found,
shall wheresoever such act may have been done or committed, have
full power and jurisdiction to hear, try, and determine such suit.
(B) Except as hereinafter provided, such suit may be brought and
carried on by any person, as well for himself as for the United States,
the same shall be at the sole cost and charge of such person, and shall
be in the name of the United States, but shall not be withdrawn or dis-
continued without the consent, in writing, of the judge of the court
and the United States attorney, first filed in the case, setting forth
their reasons for such consent.
(C) Whenever any such suit shall be brought by any person under
clause (B) of this section notice of the pendency of such suit shall be
given to the United States by serving upon the United States attorney
for the district in which such suit shall have been brought a copy of
the bill of complaint and by sending, by registered mail, or by certi-
fied mail, to the Attorney General of the United States at Washington,
District of Columbia, a copy of such bill together with a disclosure in
writing of substantially all evidence and information in his possession
material to the effective prosecution of such suit. The United States
shall have sixty days, after service as above provided, within which to
enter appearance in such suit. If the United States shall fail, or decline
in writing to the court, during said period of sixty days to enter any
such suit, such person may cany on such suit. If the United States
within said period shall enter appearance in such suit the same shall be
carried on solely by the United States. In carrying on such suit the
United States shall not be bound by any action taken by the person
who brought it, and may proceed in all respects as if it were instituting
the suit: Provided, That if the United States shall fail to carry on such
suit with due diligence within a period of six months from the date of
its appearance therein, or within such additional time as the court
after notice may allow, such suit may be carried on by the person
bringing the same in accordance with clause (B) of this section. The
court shall have no jurisdiction to proceed with any such suit brought
under clause (B) of this section or pending suit brought under this
section whenever it shall be made to appear that such suit was based
upon evidence or information in the possession of the United States,
or any agency, officer or employee thereof, at the time such suit was
45-937 O - 79 - 14
206
brought: Provided, however, That no abatement shall be had as to a
suit pending on December 23, 1943, if before such suit was filed such
person had in his possession and voluntarily disclosed to the Attorney
General substantial evidence and information which was not thereto-
fore in the possession of the Department of Justice.
(D) In any suit whether or not on appeal pending on December 23,
1943, brought under this section, the court in which such suit is pend-
ing shall stay all further proceedings, and shall forthwith cause written
notice, by registered mail, or by certified mail, to be given the Attorney
General that such suit is pending, and the Attorney General shall
have sixty days from the date of such notice to appear and carry on
such suit in accordance with clause (C) of this section.
(E)(1) In any such suit, if carried on by the United States as
herein provided, the court may award to the person who brought such
suit, out of the proceeds of such suit or any settlement of any claim
involved therein, which shall be collected, an amount which in the
judgment of the court is fair and reasonable compensation to such
person for disclosure of the information or evidence not in the posses-
sion of the United States when such suit was brought. Any such
award shall in no event exceed one-tenth of the proceeds of such suit
or any settlement thereof.
(2) In any such suit when not carried on by the United States as
herein provided, whether heretofore or hereafter brought, the court
may award to the person who brought such suit and prosecuted it to
final judgment, or to settlement, as provided in clause (B) of this sec-
tion, out of the proceeds of such suit or any settlement of any claim
involved therein, which shall be collected, an amount, not in excess of
one-fourth of the proceeds of such suit or any settlement thereof,
which in the judgment of the court is fair and reasonable compensa-
tion to such person for the collection of any forfeiture and damages;
and such person shall be entitled to receive to his own use such rea-
sonable expenses as the court shall find to have been necessarily in-
curred and all costs the court may award against the defendant, to be
allowed and taxed according to any provision of law or rule of court in
force, or that shall be in force in suits between private parties in said
«ourt: Provided, That such person shall be liable for all costs incurred
by himself in such case and shall have no claim therefor on the United
States.
(R.S. § 3491; June 25, 1936, c. 804, 49 Stat. 1921; Dec. 23, 1943, c.
377, § 1, 57 Stat. 608; June 25, 1948, c 646, §§ 1, 32(b), 62 Stat. 909,
991; May 24, 1949, c. 139, § 127, 63 Stat. 107; June 11, 1960, Pub. L.
86-507, § 1(28), (29), 74 Stat. 202.)
§233. Duty of United States attorney as to such eases
It shall be the duty of the several United States attorneys for the
respective districts, for the District of Columbia, and for the several
Territories, to be diligent in inquiring into any violation of the provi-
sions of section 231 of this title by persons liable to such suit, and
found within their respective districts or Territories, and to cause
them to be proceeded against in due form of law for the recovery of
such forfeiture and damages. And such person may be arrested and
held to bail in such sum as the district judge may order, not exceeding
the sum of $2,000, and twice the amount of the damages sworn to in
tthe affidavit of the person bringing the suit.
(R.S. § 3492; June 25, 1948, c. 646, § 1, 62 Stat. 909.)
207
39. 31 U.S.C. sec. 628
§628. Application of moneys appropriated
Except as otherwise provided by law, sums appropriated for the var-
ious branches of expenditure in the public service shall be applied
solely to the objects for which they are respectively made, and for no
others.
(R.S. § 3678).
40. 39 U.S.C. sec. 1002
§1002. Political recommendations
(a) Except as provided in subsection (e) of this section, each ap-
pointment, promotion, assignment, transfer, or designation, interim
or otherwise, of an officer or employee in the Postal Service (except a
Governor or member of the Postal Rate Commission) shall be made
without regard to any recommendation or statement, oral or written,
with respect to any person who requests or is under consideration for
such appointment, promotion, assignment, transfer, or designation,
made by —
(1) any Member of the Senate or House of Representatives
(including the Resident Commissioner from Puerto Kico) ;
(2) any elected official of the government of any State (in-
cluding the Commonwealth of Puerto Rico) or of any county,
city, or other political subdivision of such State or Common-
wealth ;
(3) any official of a national political party or of a political
party of any State (including the Commonwealth of Puerto
Rico) , county, city, or other subdivision of such State or Common-
wealth; or
(4) any other individual or organization.
(b) Except as provided in subsection (e) of this section, a person or
organization referred to in clause (1), (2), (3), or (4) of subsection (a)
of this section is prohibited from making or transmitting to the Postal
Service, or to any other officer or employee of the Government of the
United States, any recommendation or statement, oral or written, with
respect to any person who requests or is under consideration for any
such appointment, promotion, assignment, transfer, or designation.
The Postal Service and any officer or employee of the Government of
the United States, subject to subsection (e) of this section —
(1) shall not solicit, request, consider, or accept any such
recommendation or statement; and
(2) shall return any such written recommendation or statement
received by him, appropriately marked as in violation of this sec-
tion, to the person or organization making or transmitting the
same.
(c) A person who requests or is under consideration for any such
appointment, promotion, assignment, transfer, or designation is
prohibited from requesting or soliciting any such recommendation or
statement from any person or organization except a statement of the
type referred to in subsection (e) (2) of this section.
(d) Each employment form of the Postal Service used in connection
with any such appointment, promotion, assignment, transfer, or
designation shall contain appropriate language in boldface type
informing all persons concerned of the provisions of this section.
208
During the time any such appointment, promotion, assignment,,
transfer, or designation is under consideration, appropriate notice-
of the provisions of this section printed in boldface type shall be posted
in the post office concerned.
(e) The Postal Service or any authorized officer or employee of the-
Government of the United States may solicit, accept, and consider,
and any other individual or organization may furnish or transmit to-
the Postal Service or such authorized officer or employee, any state-
ment with respect to a person who requests or is under consideration
for such appointment, promotion, assignment, transfer, or designation,
if—
(1) the statement is furnished pursuant to a request or require-
ment of the Postal Service and consists solely of an evaluation of
the work performance, ability, aptitude, and general qualifications
of such person ;
(2) the statement relates solely to the character and residence-
of such person ;
(3) the statement is furnished pursuant to a request made by
an authorized representative of the Government of the United'
States solely in order to determine whether such person meets
the loyalty, suitability, and character requirements for employ-
ment with the Government of the United States; or
(4) the statement is furnished by a former employer of such.
person pursuant to a request of the Postal Service, and consists-
solely of an evaluation of the work performance, ability, aptitude,
and general qualifications of such person during his employment
with such former employer.
(f) The Postal Service shall take any action it determines necessary
and proper, including but not limited to suspension, removal from
office, or disqualification from the Postal Service, to enforce the pro-
visions of this section.
(g) The provisions of this section shall not affect the right of an
officer or employee of the Postal Service to petition Congress as author-
ized by section 7102 of title 5.
(Pub. L. 91-375, Aug. 12, 1970, 84 Stat. 729.)
Effective Date: Section effective March 1, 1971, pursuant to Resolution No.
71-13 of the Board of Governors of the U.S. Postal Service. See section 15(c) of
Pub. L. 91-375, set out as a note preceding section 101 of this title.
Legislative History: For legislative history and purpose of Pub. L. 91-375,
see 1970 U.S. Code Cong, and Adm. News, p. 3649.
41. 39 U.S.C. sec. 3210
§ 3210. Franked mail transmitted by the Vice President, Members of Congress,,
and congressional officials
(a)(1) It is the policy of the Congress that the privilege of sending
mail as franked mail shall be established under this section in order
to assist and expedite the conduct of the official business, activities,
and duties of the Congress of the United States.
(2) It is the intent of the Congress that such official business,,
activities, and duties cover all matters which directly or indirectly
pertain to the legislative process or to any congressional representative
functions generally, or to the functioning, working, or operating of the
Congress and the performance of official duties in connection there-
with, and shall include, but not be limited to, the conveying of infor-
209
mation to the public, and the requesting of the views of the public,
-or the views and information of other authority of government, as a
guide or a means of assistance in the performance of those functions.
(3) It is the intent of the Congress that mail matter which is frank-
-able specifically includes, but is not limited to —
(A) mail matter to any person and to all agencies and officials
of Federal, State, and local governments regarding programs,
decisions, and other related matters of public concern or public
service, including any matter relating to actions of a past or
current Congress;
(B) the usual and customary congressional newsletter or press
release which may deal with such matters as the impact of laws
and decisions on State and local governments and individual citi-
zens; reports on public and official actions taken by Members of
Congress; and discussions of proposed or pending legislation or
governmental actions and the positions of the Members of Con-
gress on, and arguments for or against, such matters;
(C) the usual and customary congressional questionnaire
seeking public opinion on any law, pending or proposed legisla-
tion, public issue, or subject;
(D) mail matter dispatched by a Member of Congress between
liis Washington office and any congressional district offices, or
between his district offices;
(E) mail matter directed by one Member of Congress to
another Member of Congress or to representatives of the legisla-
tive bodies of State and local governments;
(F) mail matter expressing condolences to a person who has
suffered a loss or congratulations to a person who has achieved
some personal or public distinction;
(G) mail matter, including general mass mailings, which
consists of Federal laws, Federal regulations, other Federal pub-
lications, publications purchased with Federal funds, or publica-
tions containing items of general information ;
(H) mail matter which consists of voter registration or election
information or assistance prepared and mailed in a nonpartisan
manner;
(I) mail matter which constitutes or includes a biography or
autobiography of any Member of, or Member-elect to, Congress or
any biographical or autobiographical material concerning such
Member or Member-elect or the spouse or other members of the
family of such Member or Member-elect, and which is so mailed
as a part of a Federal publication or in response to a specific
xequest therefor and is not included for publicity purposes in a
newsletter or other general mass mailing of the Member or
Member-elect under the franking privilege ; or
(J) mail matter which contains a picture, sketch, or other like-
ness of any Member or Member-elect and which is so mailed as a
part of a Federal publication or in response to a specific request
therefor and, when contained in a newsletter or other general
mass mailing of any Member or Member-elect, is not of such
size, or does not occur with such frequency in the mail matter
concerned, as to lead to the conclusion that the purpose of such
picture, sketch, or likeness is to advertise the Member or Member-
elect rather than to illustrate accompanying text.
210
(4) It is the intent of the Congress that the franking privilege under
this section shall not permit, and may not be used for, the transmission
through the mails as franked mail, of matter which in its nature is
purely personal to the sender or to any other person and is unrelated
to the official business, activities, and duties of the public officials-
covered by subsection (b) (1) of this section.
(5) It is the intent of the Congress that a Member of or Member-
elect to Congress may not mail as franked mail —
(A) mail matter which constitutes or includes any article,
account, sketch, narration, or other text laudatory and compli-
mentary of any Member of, or Member-elect to, Congress on a
purely personal or political basis rather than on the basis of
performance of official duties as a Member or on the basis of
activities as a Member-elect;
(B) mail matter which constitutes or includes —
(i) greetings from the spouse or other members of the
family of such Member or Member-elect;
(ii) reports of how or when such Member or Member-elect,
or the spouse of any other member of the family of such
Member or Member-elect, spends time other than in the-
performance of, or in connection with, the legislative, repre-
sentative, and other official functions of such Member or the
activities of such Member-elect as a Member-elect; or
(iii) any card expressing holiday greetings from such
Member or Member-elect ;
(C) mail matter which specifically solicits political support for
the sender or any other person or any political party, or a vote
or financial assistance for any candidate for any public office; or
(D) any mass mailing when the same is mailed at or delivered
to any postal facility less than 28 days immediately before the-
date of any primary or general election (whether regular, special,
or runoff) in which such Member or Member-elect is a candidate-
for public office. For the purpose of this clause (D), the term
"mass mailing" shall mean newsletters and similar mailings of
more than 500 pieces in which the content of the matter mailed
m substantially identical but shall not apply to mailings —
(i) which are in direct response to inquiries or requests
from the persons to whom the matter is mailed ;
(ii) to colleagues in Congress or to government officials-
(whether Federal, State, or local) ; or
(iii) of news releases to the communications media.
The House Commission on Congressional Mailing Standards and the
Select Committee on Standards and Conduct of the Senate shall
prescribe for their respective Houses such rules and regulations and
shall take such other action, as the Commission or Committee con-
siders necessary and proper for the Members and Members-elect to
conform to the provisions of this clause and applicable rules and regu-
lations. Such rules and regulations shall include, but not be limited to,
provisions prescribing the time within which such mailings shall be
mailed at or delivered to any postal facility to attain compliance
with this clause and the time when such mailings shall be deemed to-
have been so mailed or delivered and such compliance attained;
211
(b)(1) The Vice President, each Member of or Member-elect to
Congress, the Secretary of the Senate, the Sergeant at Arms of the
Senate, each of the elected officers of the House of Representatives
(other than a Member of the House), and the Legislative Counsels of
the House of Representatives and the Senate, may send, as franked
mail, matter relating to their official business, activities, and duties,
as intended by Congress to be mailable as franked mail under sub-
section (a)(2) and (3) of this section.
(2) If a vacancy occurs in the Office of the Secretary of the Senate,
the Sergeant at Arms of the Senate, an elected officer of the House of
Representatives (other than a Member of the House) , or the Legisla-
tive Counsel of the House of Representatives or the Senate, any
authorized person may exercise the franking privilege in the officer's
name during the period of the vacancy.
(3) The Vice President, each Member of Congress, the Secretary of
the Senate, the Sergeant at Arms of the Senate, and each of the elected
officers of the House (other than a Member of the House), during the
90-day period immediately following the date on which they leave
office, may send, as franked mail, matter on official business relating
to the closing of their respective offices. The House Commission on
Congressional Mailing Standards and the Select Committee on Stand-
ards and Conduct of the Senate shall prescribe for their respective
Houses such rules and regulations, and shall take such other action
as the Commission or Committee considers necessary and proper, to
carry out the provisions of this paragraph.
(c) Franked mail may be in any form appropriate for mail matter,
including, but not limited to, correspondence, newsletters, question-
naires, recordings, facsimiles, reprints, and reproductions. Franked
mail shall not include matter which is intended by Congress to be
nonmailable as franked mail under subsection (a) (4) and (5) of this
section.
(d) (1) A Member of the House may mail franked mail with a
simplified form of address for delivery —
(A) within that area constituting the congressional district from
which he was elected; and
(B) on and after the date on which the proposed redisricting
of congressional districts in his State bjr legislative or judicial
proceedings is initially completed (whether or not the redistrict-
ing is actually in effect), within any additional area of each con-
gressional district proposed or established in such redisricting
and containing all or part of the area constituting the congressional
district from which he was elected, unless and until the congres-
sional district so proposed or established is changed by legislative
or judicial proceedings.
(2) A Member-elect to the House of Representatives may mail
franked mail with a simplified form of address for delivery within
that area constituting the congressional district from which he was
elected.
(3) A Delegate, Delegate-elect, Resident Commissioner, or Resident
Commissioner-elect to the House of Representatives may mail franked
mail with a simplified form of address for delivery within the area
from which he was elected.
(4) Franked mail mailed with a simplified form of address under
this subsection —
212
(A) shall be prepared as directed by the Postal Service; and
(B) may be delivered to —
(i) each box holder or family on a rural or star route;
(ii) each post office box holder; and
(iii) each stop or box on a city carrier route.
(5) For the purpose of this subsection, a congressional district in-
cludes, in the case of a Representative at Large or Representative at
Large-elect, the State from which he was elected.
(e) The frankability of mail matter shall be determined under the
provisions of this section by the type and content of the mail sent, or to
be sent. Notwithstanding any other provision of law, the cost of pre-
paring or printing mail matter which is frankable under this section
may be paid from any funds, including, but not limited to, funds col-
lected by a candidate or a political committee required to file reports of
receipts and expenditures under the Federal Election Campaign Act
of 1971 (Public Law 92-225), or from voluntary newsletter funds, or
from similar funds administered and controlled by a Member or by a
committee organized to administer such funds.
(f) Notwithstanding any other provision of Federal, State, or local
law, or any regulation thereunder, the equivalent amount of postage
determined under section 3216 of this title on franked mail mailed
under the frank of the Vice President or a Member of Congress, and the
cost of preparing or printing such frankable matter for such mailing
under the frank, shall not be considered as a contribution to, or an ex-
penditure by, the Vice President or a Member of Congress for the
purpose of determining any limitation on expenditures or contributions
with respect to any such official, imposed by any Federal, State, or
local law or regulation, in connection with any campaign of such
official for election to any Federal office.
(Pub. L. 91-375, Aug. 12, 1970, 84 Stat. 754, amended Pub. L. 92-51,
§ 101, July 9, 1971, 85 Stat. 122; Pub. L. 93-191, § 1(a), Dec. 18, 1973,
87 Stat. 737; Pub. L. 94-177, Dec. 23, 1975, 89 Stat. 1032.)
42. 41 U.S.C. sec. 22
§ 22. Interest of Member of Congress
In every contract or agreement to be made or entered into, or
accepted by or on behalf of the United States, there shall be inserted
an express condition that no Member of Congress shall be admitted
to any share or part of such contract or agreement, or to any benefit
to arise thereupon. Nor shall the provisions of this section apply
to any contracts or agreements heretofore or hereafter entered into
under the Agricultual Adjustment Act, the Federal Farm Loan Act,
the Emergency Farm Mortgage Act of 1933, the Federal Farm
Mortgage Act, the Farm Credit Act of 1933, and the Home Owners'
Loan Act of 1933, and shall not apply to contracts or agreements of
a kind which the Secretary of Agriculture may enter into with farmers:
Provided, That such exemption shall be made a matter of public
record. R.S. § 3741; Feb. 27, 1877, c. 69, § 1, 19 Stat. 249; Jan. 25,
1934, c. 5, 48 Stat. 337; June 27, 1934, c. 847, Title V, § 510, 48 Stat.
1264; Aug. 26, 1937, c. 821, 50 Stat. 838.
INDEX
Abstention from voting: Pa & e
Conviction of crime 6-7, 124
Personal interest in matter 91, 94-97, 127
Breweries and distilleries 95
Central Pacific Railroad 96
Defense contractor 96-97
Import business 95
Military pensions 1 95
Municipal bonds 96
National banks 95
Accounting for official allowances :
Certifications 24
Recommended procedure 24
Vouchers 24
Adjudication by Federal agencies 32-33, 181-1S2
Advertisements, personal:
Official expenses 23
Political expenses 112
Airline carriers:
Gifts from 52
Inaugural flights 53, 136
Representation of before Federal agencies 31
Allowances (see "official allowances").
Allowance for official expenses 22-23
American Bar Association Code of Professional Responsibility. 73, 75-76, 78, 79
Amusement park, courtesy pass 54
Bank stock 95
Blind trusts;
Assets 100, 101
Conflicts of interest 100, 101
Disclosure of trusts, generally 100
Existing trusts 103
Generally 100-103, 173-176
Notifications and filings 102
Prohibitions and enforcements 102-103
Trust instrument requirements 101-102
Trustee 101
Bribery:
For Federal jobs 15
Generally 57, 58, 189-191
Illegal gratuities 57-58
British Broadcasting Corporation 70
Buy-out arrangements 63
Campaign activities:
By House employees 105, 106, 115-116
Finances (see "campaign funds and finances").
In a Federal building 118-120, 197
Use of official facilities for 119
Campaign contributions (see "campaign funds and finances" and "political
contributions").
Campaign depositories 107
Campaign finance reports 107
(213)
214
Campaign funds and finances: **•»*•
Campaign depositories 107
Campaign finance reports 107
Cash contributions 108
Contribution limitations 107-108
Corporate contributions 107
Excess campaign funds 114
Federal contractors 107
Federal employees 108-109, 116-118, 196, 198
Foreign nationals 108
Generally 105-122
Labor union contributions 107
Political action committee, PACs 107-108
Principal campaign committee 106-107
Public utility holding company 108
Registration 106-107
Reporting 106-107
Separate segregated funds 107-108
Use of campaign funds 109-114
Advertisements 112
Dinner expenses 111-112
Excess funds 114
Holiday greetings 112
Official expenses 111-113
Personal expenses 110-111
Travel to home district 110-111, 112
Clerk hire allowance 12-13, 16, 18, 126
Code of Ethics for Government Service 5,
7-9, 61-62, 66-67, 82, 83, 85, 92-93, 94, 167
Commercial land development 93-94
Commission on Administrative Review.. 25, 26, 50-51, 56, 60, 64, 92, 97, 111, 113
Commission on Congressional Mailing Standards 39, 40, 41-42, 44-45
Committee on House Administration, Regulations and Accounting Pro-
cedures for Allowances and Expenses 13-14, 16, 21, 22-23, 24
Committee on Standards of Official Conduct:
Generally - 3-10, 93-94, 96-97, 127-166
Opinions:
Campaigning by staff 116, 134
Clerk hire 16, 18-19, 133-135
Communicating to Federal agencies 29, 32, 35-36, 77
Law practice 77, 132
Regulations on gifts and decorations from foreign governments. 55, 127-130
Commodities 94
Communications to Federal agencies:
Compensation for 30-31, 65-67, 74-75, 76-79, 84
Ex parte communications 29, 32-33
Generally . 28-38
Private representations by staff 31-32, 84-85
Recommendations for employment 36-37
Standards of Official Conduct Committee opinion 35-36, 127-132
Undue influence, fraud 33-35
Compensation, for services before Federal agencies ' 30-31,
65-67, 74-75, 76-79, 84
Compensation, outside or additional (see "outside employment and
compensation").
Computer services, expenses for , 22
Condolences, as franked mail 42-43
Conduct reflecting creditably on the House 3-5, 123
Confidential information:
Commodities 94
Outside compensation 62, 83
Outside investments 94
Conflicts of interest:
Abstentions from voting 91,94-97
Disclosure 91-92, 97, 100-101
Employee's outside employment or compensation 83
Financial investments 90-92, 93, 97, 100-101
Law practice 73-74, 76, 78-79
Member's outside employment and compensation 60-61,
61-62, 66, 67, 73-74, 76, 78-79
215
Page
"Congratulations, as franked mail 42,43
'Constituents:
Constituency services 29
Franked mail to (see "franking privilege") 39, 41-42
Inquiries to Federal agencies on behalf of (see "communications to
Federal agencies").
Recommendations to Federal employment 36-37
Contracting with the Federal Government, by Members:
Corporate exemption 67-68
Employment with contractor 67
Exemptions 69
Generally 67-69,97,194
Partnerships 67
Shareholders in corporation 67-68, 97
'Contracts with Federal Government, by employees.- 85-86
'Contributions:
Political (see "political contributions").
To office accounts (see "unofficial office accounts").
'Conversion , 24, 198
Conviction of Member, legislative activity 6-7, 124
Corporate political contributions 105, 107, 121
'Country club, honorary membership in 54
•Credit Mobilier Corporation 49
Dinner expenses 25, 111-112
Discrimination in employment 11, 12, 14-15, 124
District office lease, expenses 22
Donations by Member 23
Double-billing 22,23-24
Dual Government employment. 81,86, 183-184
Dues or assessments paid by Member 23
Duties of Member's staff 12, 13-14, 16-19, 40, 106, 107, 115-116
Earned income 59, 60-61, 62-65, 90
Earned income limitation:
Accrual basis 65
Business corporations 63
Close corporations 64-65
Family business or farm 64-65
Generally 59, 60-61, 62-65, 71, 74, 79, 90, 126
Partnerships 64
Personal service businesses 63
TJnicorporated businesses 64
Educational expenses:
From foreign governments 55, 129
Official expenses, not as. 23
Embezzlement. , 24, 198
Entertainment, receipt of (see "gifts").
Excess campaign funds 114
Death of Member 114
Ex parte communications 28, 29, 32-33, 36, 181-182
Fact-finding tours 52-53
False claims 17-18,21,23-24, 116,204
Talse Claims Act 23, 116,204-206
False statements 15-16, 24, 198
Favors (see "gifts").
Federal agencies:
Communications to (see "communications to Federal agencies").
Compensation for services before 30-31, 65-67, 74-75, 76-79, 84, 191
Representations before 31-32, 81, 84-86, 192
Federal employees:
Political contributions by 116-118
Political contributions from 108-109
'Federal employment:
Bribery 15,38
Political activities or contributions for 15,38
Recommendations by Member for 27, 36-37
216
Financial disclosure: Pag»
Agreements for future or continuing benefits 99~
Blind trusts 100-103
Debts 99-
Generally 58,79-80,88,89-92 97-103, 169-181
Gifts .___ 58, 98, 99-
Income 79-80, 88, 98, 99
Financial holdings 91, 92, 98, 100-103
Positions held . 1 99
Spouse and dependents 99-100 1
Transactions in property and securities ■ 99-
Financial interests and investments:
Abstentions from voting 91, 94-97
Bank stock 95>
Blind trusts 100-103
Commercial land development ■. 93-94
Commodities 94r
Conflicts of interest 90-92, 93, 97, 100-101
Corporations with Government contracts 67-69, 97, 194
Disclosure 89-92,97-98, 100-101
Disqualification . «. 91-92
Divestiture 91
Use of office for personal gain 92-94
Foreign governments:
Acting as agent of 81, 87"
Compensation or "emoluments" from 69-70, 86-87
Gifts from 54-55, 127-130*
Foreign nationals:
Campaign contributions 105, 107, 121
Gifts from 50-54, 123-
Former Members, franking privilege 41
Foundations:
Foreign 70>
Private 69, 73, 88, 199-204
Franking privilege:
Authorization 40, 41
Commission on Congressional Mailing Standards 39, 40, 41—42, 44-45
Committees, use of 41
Former Members 41
Generally 26, 39-45, 112-113, 208-212"
Guidelines for frankability, summary 42-43
Loan of the frank 41
Mass mailings 26, 44, 112-11 J
Newsletters ^_ 39,41-43
Postal patron mail 39, 44, 45
Questionnaires 39, 41-42, 43
Responsibility of Member's staff 40-41
Return mail 41
Standards of frankability, generally 41-43'
Surviving spouse of Member 41
Fraud - 15-16, 17-18, 23-24, 33-35, 116, 198, 204-206
Fundraisers:
As campaign contributions 47, 55-57, 113-114, 123"-
Direct mail solicitations 56, 113 1
Illness of family member 57, 113-
Legal defense fund 57, 113-114-
On Member's behalf 56-57, 113-
217
.Gifts: Page
Airline carriers 52
Bribery 57-58
Courtesy pass 54
Definition 53
Fact-finding tours 52-53
Financial disclosure 58, 98, 99
Foreign governments 54-55, 127-130
Foreign nationals . 50
Fundraisers 55-57
Honorary memberships 54
Golf tournaments, celebrity, pro-am 52
House receptions 51
Illegal gratuities 57-58
Lobbyists 50, 51-52
One hundred dollar limit 50-54
Personal hospitality . 50, 51
Persons with direct interest in legislation , 51-52
Political action committees 51-52
Spouse of Member or employee 54
Testimonials 55-57
Tickets to political dinner «. 54
Tickets to sports events 54
Tickets to theatre 54
Transportation or travel expenses:
Conferences 52
Fact-finding tours 52-53
To home district 53
Valuation of gifts. 54
Government in the Sunshine Act 32-33, 181-182
Golf tournaments, celebrity pro-am, expenses paid 52
Holiday greetings:
Expenses for, not official 23
Nonfrankability of 39, 42, 43
Political expense 112
Honorarium:
Award, not as honorarium 72, 87
Campaign contribution, not as honorarium 72
Defined 71, 72, 87-88
Employees of the House, generally 87-88, 72-73
Federal Election Commission Regulations 71-72,87-88
Gift, not as honorarium 72, 88
Limit, House rule 70-71, 72-73
Limit, statute 71, 87-88, 168
Members of the House, generally 70-73
Statutory limit 71, 87-88, 168
Stipend, not as honorarium 72, 88
Usual and customary value 72-73
Illness of family member, fundraiser 57, 113
Impoundment 31-32
Inaugural flights 53, 136
Income limitation (see "earned income limitation").
Income, outside or additional (see "outside employment and compensation
of Members" and "outside employment and compensation of employees").
In-kind contributions 24, 25, 26
Inquiries to Federal agencies as to status of proceeding 31, 33, 35
Inspection tours 52-53
Intern programs 26
Interventions in administrative proceedings (see "communications to
Federal agencies").
Itinerary of Member, franking 42, 44
Investments (see "financial interests and investments").
218
Page-
Kickbacks 11, 12, 15-16
Korean influence investigation ; : 4
Labor unions, campaign contributions 105, 107, 121
Law practice:
ABA Code of Professional Responsibility 73, 75-76, 78, 79
Buy-out arrangements 63
Conflicts of interest 73-74, 76, 78-79
Court of Claims 74
Dual partnerships 77-79
Facade practice 75-76
Federal practice 74-75, 76-79
Federal practice by partner or firm 76-79
Generally 73-79
Income limitation 63, 64
Indian Claims Commission 74
Merchant Marine contractor 74
Name in firm 75-76
Senate rule 74
Legal Defense fund 57, 113-114
Legislative Counsel of House, franking privilege 41
Lobbyists, gifts from 50-54
Logging methods, inspection tour 53
Mail fraud 16, 18
Mass mailings :
Expenses for 26, 112-113
Franking 44
Postal patron mail 44
Meeting places, private 26
Merit system 36-37
Nepotism : 12, 14
Newsletters 26, 39, 41-42, 43, 112
Office accounts (see "unofficial office accounts").
Office equipment lease, expenses 22
Officers of the House, franking privilege 40, 41
Official allowances:
Accounting procedure recommended 24
Allowance for official expenses 22-23
Committee on House Administration, regulations 13-14, 16, 21, 22-23, 24'
False claims 17-18, 23-24
Fraud 17-18,23-24
Generally J 21-26 ;
Regulations 21, 22-23, 24
Travel expenses 22'
Unofficial office accounts 24-26
Official expenses 21, 22-23
Oil drilling platform, inspection of 53
Outside employment and compensation of House employees:
Agent of foreign principal 81, 87
Compensation for service before Federal agency 81, 84-85, 191
Confidential information 83
Conflicts of interest 81, 82-83
Dual Government employment 81, 86, 183-184
Financial disclosure 88, 98, 99'
Foreign governments 86-87
Generally 81-88
Honorarium restrictions 87-88, 168
Negotiations with Federal Government 85-86-
Performance of official duties 82-84'
Private foundations 88, 199, 204
Professional staff of committees 83-84
Representations before the Federal Government 84-86, 192?
Use of position for private gain 85
219
Pnge
Outside employment and compensation of Members:
Earned income limit (see "earned income limitation").
Compensation for services before Federal agencies __ 59-
65-67, 74-75, 76-79, 191
Confidential information 62
Conflicts of interest 59, 60-62, 66, 67, 73-79
Contracting with the Federal Government 67-69, 194
Federal agencies, compensation for services before _ 59
65-67, 74-75, 76-79, 191
Financial disclosure 79-80, 98, 99'
Foreign governments 59 ; 69-70
Generally. ____ 59-80
Honorariums 70-73.
Law practice (see "law practice").
Private foundations 69
Use of position for personal gain 61 62
Payroll padding 12, 17-18
Personal advertisements (see "advertisements, personal"). '
Pictures of Member, franking 42 43.
Political action committees, PACs:
Contributions by 107-10&
Corporate and labor union contributions 107-108
Gifts from, and sponsoring organizations 51-52"
Political activities by House employees (see "campaign activities").
Political contributions:
Between Members of Congress __ 109-
Cash 105, 108, 121
Contractors 105, 107, 121
Corporations 105, 107, 121
Excess _____ 105, 107-108, 121
Federal employees 105, 108-100; 116-118, 121
Foreign nationals 105, 108, 121
Labor unions 105, 107, 121
Limitations 107-108, 121
Political action committees 107-108-
Public utility holding companies 107
Reporting 106-107
Use of _ 109-114
Postage expenses 22*
Postal patron mail 39 ; 44 ? 45
Postal Service:
Franked mail (see "franking privilege").
Recommendations for employment in 37
Practice of law (see "law practice").
Principal campaign committee 106-107
Private representations before the Government 3-1-32, 84-86, 192"
Questionnaires, franking 41-42, 43
Radio time, expenses 23
Recommendations for employment:
In competitive service 27, 36-37
In Postal Service 27, 37
Recruitment and employment expenses ' 22
Relatives:
Employment of 14
Gifts from 47 > 59.
Rulemaking by Federal agencies 32-33
Select Committee on Ethics, 95th Congress __ _ 6
25-26, 51-54, 56-57, 63-65, 11 2," 1 13-114
Separate segregated funds 51-52, 107-108
Services received from State, Federal, or local governments-:
Gifts, not included as 53
Unofficial office accounts, not considered as 26
Services rendered before Federal agencies:
Advertising 66-67, 76-
Breach of fiduciary duty __ 66
Compensation 30-31, 65^-67, 74?-75, 76-79, 84-85
Law practice 74-75, 76-79-
Partnership 66, 76-79, 84-85-
Salary from firm 66-67, 76-77, 84-85-
220
Paarn
Ship launchings i , . 53
Slush funds (see "unofficial office accounts").
Spirit of House rules 5-6
Spouse of Member or employee:
Financial disclosure 99-100
Franking privilege, surviving spouse of Member 41
Gifts to i 54
Greetings from and reports on, not frankable 42, 43
Travel and transportation expenses 53, 55
Staff of Member:
Campaign activities 105, 106, 115-116
Clerk hire allowance 12-13, 16, 18, 126
Committee on House Administration, regulations on employment and
compensation of staff 13-14, 16
Committee on Standards of Official Conduct opinions 16,
18-19, 116, 133-135
Discrimination 14-15
Employment and compensation of, generally 11-19
Franked mail, responsibilities 40-41
Nepotism 14
Official duties 12-13, 16-19, 115-116
Outside employment and compensation (see "outside employment and
compensation of House employees").
Payroll padding 12, 17-18
Representational activity before Federal agencies 31-32, 81, 84-86, 192
Salary kickbacks 11, 12, 15-16
Use of staff on campaigns _ — 115-116
Stationery expenses 22
Sunshine Act, Government in the 32-33, 181-182
Telecommunications expenses ,*-*'- 22
Television time, expenses for -___ 23
Testimonials (see ^fundraisers").
Theft 24,198
Tickets, as gifts:
Political dinners. : 54
Sporting events 54
Theater 54
Transportation expenses (see "travel and transportation expenses").
Travel and transportation expenses:
Compensation 52, 70, 71, 87
Conferences i , : 52
Fact-finding tours 52-53
Foreign governments 54-55, 70
Gifts 52-53, 55, 70
Home district 25, 53, 111-112
Honorariums 71, 87
Official expenses 22, 25
Political expenses 25, 111-112
Pteimbursements from official funds :
Mode of travel 23
Trips allegedly not taken 24
Undue influence on administrative proceeding:
Congressional hearings 33
Fraud 33-35
Threats or reprisals 35-36
Standards of Official Conduct Committee opinion 35-36, 130-132
Unjust enrichment 23
Use of campaign funds 109-114
Use of excess campaign funds 114'
Volunteer programs 26
Voting, abstention from :
Conviction of a crime 6-7, 124
Personal interest in a matter. , 91, 94-97, 127
o
96th Congress, 1st Session House Document No. 96-135
RELEASE OF BUDGET AUTHORITY
AND REVIEW OF DEFERRALS
COMMUNICATION
FROM
THE COMPTROLLER GENERAL OF THE
UNITED STATES
TRANSMITTING
A REPORT ON THE RELEASE OF CERTAIN BUDGET AUTHOR-
ITY, THE RESCISSION OF WHICH WAS PROPOSED BY THE
PRESIDENT AND NOT APPROVED BY THE CONGRESS, TO-
GETHER WITH HIS REVIEW OF THE DEFERRALS AND RE-
VISED DEFERRAL OF BUDGET AUTHORITY CONTAINED IN
THE MESSAGE FROM THE PRESIDENT DATED APRIL 30, 1979
(HOUSE DOCUMENT NO. 9C-10G), PURSUANT TO SECTION 1014
(B) AND (C) OF PUBLIC LAW 93-344
May 30, 1979. — Referred to the Committee on Appropriations
and ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
39-012 WASHINGTON : 1979
Comptroller General of the United States,
Washington, B.C., May 30, 1970.
B-115398.
Hon. Thomas P. O'Neill, Jr.,
Speaker of the House of Representatives.
Dear Mr. Speaker : This letter reports the release of budget author-
ity required to be made available for obligation pursuant to section
1012(b) of the Impoundment Control Act of 1974 and provides the
Congress with our comments on the President's ninth special message
that was sent to the Congress on April 26, 1 979.
Release of funds
The fifth special message for fiscal year 1979 submitted by the Presi-
dent transmitted 10 rescission proposals (R79-2 through R79-11). Ex-
cept as discussed below, we have confirmed that all of the funds
involved in these 10 rescissions have either been rescinded (See Public
Law 96-7, enacted Apr. 9, 1979) or made available for obligation as
required by law (31 U.S.C. 1102 (b) ) .
Rescission proposal R79-2, Department of Energy, Energy Pro-
grams, Fossil Energy Construction, was not accepted by the Congress.
The 45-day period of continuous session during which the funds may
be withheld pending congressional consideration expired on March 27,
1979. The $50 million in budget authority sought for rescission in
R79-2 was, instead, made a proposed deferral (D79-55) and included
in the President's ninth special message, April 26, 1979. Thus, these
funds have not been made available for obligation.
For rescission proposal R79-10, Foreign Claims Settlement Com-
mission, payment of Vietnam prisoner of war claims, the Congress
rescinded $8 million of the $9 million proposed. The remaining $1
million has not been made available for obligation but, instead, was
included in deferral D79-29A. another of the items transmitted in
the ninth special message.
Ninth special message
On April 26, 1979, we received copies of the President's ninth special
message for fiscal year 1979 that was transmitted to the Congress pur-
suant to the Impoundment Control Act of 1974. Our comments on this
message follow :
Department of Energy
D79-55 Energy Programs Fossil Energy Construction 80X021. /
Foreign Claims Settlement Commission
D79-29A Payment of Vietnam Prisoner of War Claims 79X0104
As noted, deferrals D79-55 and D79-29A were the subject of pro-
posed rescissions in the President's fifth special message (R79-2 and
R79-10, respectively) .
(1)
H. Doc. 135
In its consideration of R79-2, the House Committee on Appropria-
tions stated- —
* * * the committee recommends that the Executive sub-
mit a deferral action on those funds not needed to complete
design and marketing studies, until such time as more de-
finitive information is available upon which to base a con-
struction decision.
House Report No. 96-25, 11 (1979) ; see also Senate Report No. 96-33,
17 (1979) , to the same effect.
Similarly, in connection with R79-10, the Senate Committee on Ap-
propriations pointed out that $1 million of the Foreign Claims Settle-
ment Commission's appropriation for Vietnam prisoner of war claims
had been transferred to its salaries and expenses account during 1979,
and the committee recommended —
* * * the deletion of $1 million from the proposed rescis-
sion in order to take similar action with respect to the Com-
mission's 1980 budget.
Senate Report No. 90-33. supra, at 12.
The special message states that the deferral is being submitted pend-
ing congressional action on the transfer recommended by the
committee.
In our opinion, submitting deferrals of budget authority in the
cases of 1)79-55 and D79-29A after rescission requests have been re-
jected for the same budget authority is technically inconsistent with
section 1012(b) of the Impoundment Control Act, which provides:
(b) Requirement To Make Available for Obligation. —
Any amount of budget authority proposed to be rescinded or
that is to be reserved as set forth in such special message
shall be made available for obligation unless, within the
prescribed 45-day period, the Congress has completed action
on a rescission bill rescinding all or part of the amount pro-
posed to be rescinded or that is to be reserved.
However, since, these deferrals were ottered in response to the express
wishes of the Senate and House Committees on Appropriations and
apparently adopted by the Congress as a whole during its review of
the bill that was enacted as Public Law 96-7, we plan no action pend-
ing further congressional actions.
With regard to the "other budgetary resources" noted in deferral
message D79-55, we point out that on March 20, 1979, an $850,000
accounting adjustment was made resulting in total other budgetary re-
sources of $142,832,898. rather than $143,682,898, as stated in the mes-
sage. This adjustment reflects an obligation incurred during the prior
year which had not been charged to this balance because it had not
been properly identified.
H. Doc. 135
Department of Energy
D79-56 Energy Programs, Fossil Energy Construction 89X0214
D79-57 Energy Programs, Strategic Petroleum Reserve 899/10218
With the exceptions noted above, we conclude the information pro-
vided m the ninth special message is correct and that the actions being
proposed have been clearly and accurately stated.
Sincerely yours,
Elmer B. Staats,
Comptroller General of the United States.
O
H. Doc. 135